interests in 2023A Bonds, except in the event that use of the book -entry system for the 2023A Bonds is discontinued.
To facilitate subsequent transfers, all 2023A Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2023A Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the 2023A Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such 2023A Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2023A Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2023A Bonds, such as prepayments, tenders, defaults, and proposed amendments to the 2023A Bond documents. For example, Beneficial Owners of 2023A Bonds may wish to ascertain that the nominee holding the 2023A Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the 2023A Bonds within a maturity are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2023A Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts 2023A Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, principal and interest payments on the 2023A Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Authority, the City or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, the Authority or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
F-2
A 2023A Bond Owner shall give notice to elect to have its 2023A Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such 2023A Bonds by causing the Direct Participant to transfer the Participant's interest in the 2023A Bonds, on DTC's records, to the Trustee. The requirement for physical delivery of 2023A Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the 2023A Bonds are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered 2023A Bonds to the Trustee's DTC account.
DTC may discontinue providing its services as depository with respect to the 2023A Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.
The Authority may decide to discontinue use of the system of book -entry only transfers through DTC (or a successor securities depository). In that event, 2023A Bonds will be printed and delivered to DTC.
THE TRUSTEE, AS LONG AS A BOOK -ENTRY ONLY SYSTEM IS USED FOR THE 2023A
BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC
PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT
OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE 2023A BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.
F-3
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APPENDIX G
FORM OF DEVELOPMENT AGREEMENT
[THIS PAGE INTENTIONALLY LEFT BLANK]
DEVELOPMENT AGREEMENT
Between
CITY OF RIALTO
a California municipal corporation
("City")
and
GRIFFIN / SWINERTON, LLC
a Delaware limited liability company
("Developer")
Dated as of December 12, 2023
City of Rialto Police Station
128 N Willow Avenue
Rialto, CA 92376
TABLE OF CONTENTS
Page
DEVELOPMENT AGREEMENT 1
RECITALS 1
1. DEFINITIONS 3
2. DEVELOPMENT OF THE PROJECT 14
2.1 Guaranteed Maximum Price of Project 14
2.2 City Contingency Costs 15
2.3 Diligent Efforts; Relationship of the Parties 15
2.4 Mutual Cooperation; Liability of City 15
2.5 Term 15
2.6 Scope of Work 15
2.7 Services 16
3. PROJECT FINANCING 16
3.1 Issuance of Bonds 16
3.2 Disbursal of Proceeds 16
4. PROJECT DESIGN 16
4.1 Selection of Development Team for Project 16
4.2 Design Contracts 17
4.3 Assignment of Certain Agreements 17
4.4 Project GMP Breakdown 17
4.5 Drawings 17
4.6 LEED Certification 17
4.7 City's Review 17
4.8 Resubmittals 18
4.9 Permit and Construction Documents 18
5. CONSTRUCTION MANAGEMENT SERVICES 18
5.1 Preconstruction Phase 18
(a) Design 19
(b) Schedule 19
(c) Constructability 19
(d) Temporary Facilities 19
(e) Categories of Work 19
(f) Construction Schedule 19
(g) Weekly Meetings and Look -Ahead Charts 20
(h) Long Lead Time Items 20
(i) Consultants 20
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TABLE OF CONTENTS
(continued)
Page
5.2 Bidding 20
(a) Competitive Bidding 20
(b) Pre -Qualification 21
(c) Procurement Plan 21
(d) Bid Bonds 21
(e) Bid Process 21
(f) Analysis 21
(g) Bidders Interest 21
(h) Receiving Bids 22
(i) Awarding Contracts 22
(j) Rejecting Bids 22
(k) Bidder Default 22
(1) Best Value 22
(m) Trade Contractor Procurement Plan 23
(n) Negotiated Trade Contractors 23
(o) General Contractor Self -Performing 23
(p) Compliance with Requirements of Law 24
5.3 Construction Phase 24
(a) Administer GC Contract 24
(b) Coordination 24
(c) Project Schedule 25
(d) Administration of Agreements 25
(e) Cash Flow Reports 25
(f) Inspections and Testing 25
(g) RFIs 25
(h) Submittals 25
(i) Changes 25
(j) Progress Reports 25
(k) Record Drawings 26
(1) Contractor Pay Apps 26
(m) Project Pay Apps 26
(n) Certifications 26
(o) Final Testing and Start -Up 26
(p) Punch List 26
(q) Final Completion 27
(r) Timely Completion 27
5.4 Costs 27
(a) Wage Rates 27
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TABLE OF CONTENTS
(continued)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Page
Wage Rate Penalty 28
Work Hour Penalty 28
Registration of Contractors 28
Payroll Records 29
Apprentices 30
Discrimination 30
Project Labor Agreement 30
6. PERMITS. 30
6.1 Permits 30
6.2 Costs 31
6.3 Schedule and Delays 31
7. CONSTRUCTION 31
7.1 Commencement of Construction 31
7.2 Delays. 31
(a) Time Extensions 31
(b) Liquidated Damages 31
7.3 Guaranteed Maximum Construction Price Contract 32
7.4 Construction Contracts 32
(a) Labor Code §1700 32
(b) Safety 33
(c) Indemnity 33
(d) Assignment 33
7.5 Protection of Persons and Property. 33
(a) Safety 33
(b) Damage 33
(c) Notices 33
7.6 Insurance During Construction 33
7.7 Use of Developer Contingency 33
7.8 Completion of Construction 34
7.9 Warranties 34
7.10 Correction of Work 35
7.11 Stop Work by City 36
7.12 Developer Default 36
7.13 Work by Separate Contractors 36
7.14 Compliance with Requirements of Law 37
TABLE OF CONTENTS
(continued)
Page
8. CHANGES TO THE WORK. 37
8.l No Changes Without City Approval 37
8.2 Developer Approved Changes in the Work 37
8.3 Change in the Work Initiated by City 37
8.4 Claims by Developer 38
8.5 Lump Sum Change Orders 38
8.6 Time and Materials Change Orders 39
8.7 Unilateral Change Orders 41
8.8 No Extension of Time Without Impact to Critical Path 41
8.9 No Additional Compensation for Early Completion 41
8.10 No Changes After Substantial Completion 41
8.11 Credits 41
8.12 Overhead and Profit 42
8.13 Compensation for Delay 42
8.14 Modifications 42
8.15 Minor Field Changes 42
8.16 Conditions Affecting the Work 43
(a) Existing Site Conditions 43
(b) Site Investigation and Representation 43
(c) Topographic Maps 43
(d) Differing Site Conditions 43
(e) City Investigation 44
(f) Disputes 44
8.17 Changes in Requirements of Law 44
9. PAYMENT OF PROJECT COSTS 45
9.1 Applications for Payment 45
9.2 Payment Procedures 47
9.3 Requisition to the Trustee 48
9.4 Initial Draw 48
9.5 Other City Costs 49
9.6 Lump Sum Work and Unit Prices 49
9.7 Allowances 49
9.8 Retention Payment 50
9.9 Final Payment 51
9.10 Stop Payment Notices 51
10. OTHER SERVICES BY DEVELOPER 51
-iv-
TABLE OF CONTENTS
(continued)
Page
11. DEVELOPER'S FIXED FEE, DEVELOPER'S FIXED OVERHEAD, AND REIMBURSABLE EXPENSES. 51
11 1 Developer's Fixed Fee and Developer's Fixed Overhead 51
11.2 Reimbursable Expenses 52
113 Payment of Developer's Fixed Fee and Developer's Fixed Overhead 52 (a) Equal Monthly Installments 52
(b) Application 52
12. COMPLETION OF THE PROJECT 52
12.1 Substantial Completion of the Project 52
12.2 Notice of Substantial Completion 52
12.3 Completion of Punch List Items 53
12.4 Final Acceptance 53
(a) AHJ Approval 53
(b) Conditional Waivers 53
(c) Punch List Complete 53
(d) Final Pay App 54
(e) Project Costs Report 54
(f) Title Policy Endorsement 54
(g) LEED Application 54
(h) Final Acceptance Obligations 54
123 Approval of Final Project Application for Payment 54
12.6 Requisition of Final Payment 55
12.7 Disbursement of Developer Contingency 55
12.8 Notice of Completion 55
12.9 Partial Occupancy 55
13. MISCELLANEOUS DEVELOPER OBLIGATIONS 56
14. DEVELOPER'S FINAL ACCEPTANCE OBLIGATIONS 57
14.1 As -Built Plans 57
14.2 Manuals 57
14.3 Warranties 57
14.4 Permits and Licenses 57
15. INDEMNIFICATION. 57
15.1 Developer's Indemnification 57
15.2 City's Indemnification 58
16. INSURANCE REQUIREMENTS 59
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TABLE OF CONTENTS
(continued)
Page
16.1 Developer's Insurance 59
16.2 City's Insurance 59
16.3 Verification of Coverage 59
16.4 Builders Risk Insurance 59
16.5 Notice of Cancellation 59
17. REPRESENTATIVES 59
17.1 Developer Representatives 59
17.2 City's Representative 60
17.3 General Contractor's Representative 60
17.4 Emergency Contacts 61
17.5 Communications 61
17.6 Timely Decisions 61
18. ACCOUNTING, INSPECTION AND AUDIT. 61
18.1 Accounts 61
18.2 Inspection and Audit 62
19. CONSTRUCTION LIENS 62
20. PRIORITY AGREEMENTS 62
21. DAMAGE AND DESTRUCTION; CONDEMNATION 63
21.1 Damage and Destruction 63
21.2 Condemnation 63
22. PAYMENT OF TAXES/ASSESSMENTS 64
22.1 Real Property Taxes 64
22.2 Other State and Local Taxes 64
23. DEFAULT AND TERMINATION. 64
23.1 Developer Default 64
(a) Material Default 64
(b) Persistent Failure 64
(c) Misappropriation 64
(d) Disregarding Laws 64
(e) Failure to Pay 64
(f) Permit Revoked 65
(g) Liens 65
(h) Defective Work 65
(i) Assignment 65
(j) Bankruptcy 65
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TABLE OF CONTENTS
(continued)
Page
23.2 City Remedies upon Developer Event of Default 65
(a) Completion of the Project 65
(b) Specific Performance 65
(c) Withhold 66
(d) Damages 66
(e) Termination 66
23.3 City Default 66
(a) Failure to Pay 66
(b) Assignment 66
(c) Material Default 66
23.4 Developer Remedies Upon City Event of Default 66
23.5 Remedies Not Exclusive 66
23.6 Termination for Convenience of City 67
23.7 Equitable Adjustment for Extended Delay 67
24. DISPUTES 68
25. MISCELLANEOUS. 68
25.1 Waiver; Modification 68
25.2 Neutral Authorship 68
25.3 Severability 69
25.4 Relationship of Parties 69
25.5 Third Party Rights 69
25.6 Assignment; Encumbrance or Pledge 69
25.7 Notices 69
25.8 Entire Agreement 70
25.9 Time Is of the Essence 70
25.10 Employees of Developer 70
25.11 Exhibits 71
25.12 Compliance with Civil Rights Laws 71
25.13 Public Records Act 72
25.14 Patent Infringement 72
25.15 Governing Law; Venue 72
25.16 Securing Worker's Compensation Insurance Certification 72
25.17 Employee Eligibility Verification 72
25.18 Section 179D Allocation 73
EXHIBIT A 1
Legal Description of Land 1
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TABLE OF CONTENTS
(continued)
Page
EXHIBIT B 1
Project Labor Agreement 1
EXHIBIT C 1
Intentionally omitted 1
EXHIBIT D 1
Breakdown of Project GMP 1
EXHIBIT E 1
Index of Approved Design Development Documents 1
EXHIBIT F 1
Project Schedule 1
EXHIBIT G 1
Developer's Insurance Requirements 1
EXHIBIT H 1
Dispute Resolution Procedure 1
EXHIBIT I 1
Developer's GMP Qualifications, Exclusions, and Allowances 1 EXHIBIT J 1
Final Completion Form 1
EXHIBIT K 1
Special Inspections and Testing 1
EXHIBIT L 1
Certificate of Substantial Completion Form 1
EXHIBIT M 1
Form of Bonds and Dual Obligee Rider 1
EXHIBIT N 1
Form of Project Application For Payment 1
EXHIBIT O 1
Intentionally omitted 1
-viii-
TABLE OF CONTENTS
(continued)
Page
EXHIBIT P 1
City -Approved Procurement Plan 1
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") dated as of December 12, 2023 is by and between the CITY OF RIALTO, a California municipal corporation ("City" or "Tenant"), and GRIFFIN / SWINERTON, LLC, a Delaware limited liability company ("Developer").
RECITALS
A. In April 2022, City issued REQUEST FOR PROPOSAL #22-062 TO DESIGN - BUILD -FINANCE -OPERATE -MAINTAIN A NEW POLICE STATION (the "RFP"). The RFP was a developer RFP (i.e., seeking a developer to take a project from design, planning and CEQA/approvals through financing and construction, which requires multiple phases); not a traditional design -bid -build or design -build contractor request for proposals.
B. Developer responded to the RFP on July 29, 2022, which contemplated a two-phase project implementation, including refinements to the site design and facility programming into a final site plan, schematic design, design development, approvals/entitlements, a Guaranteed Maximum Price (GMP), and project financing by Developer in close collaboration with and approval by Tenant (Phase 1); and Developer's completion of construction drawings and vertical development of the Project (Phase 2).
C. After a multi -step developer solicitation process that included the RFP and an interview, Tenant selected Developer and Developer's two-phase proposal on November 15, 2022 to develop, design, construct, finance, operate, and maintain/manage the Project, relying upon Tenant's primary selection criteria including the proposers' demonstrated competence and qualifications for studying, planning, designing, permitting, developing, fmancing, constructing, operating, managing, and maintaining a project that will fulfill Tenant's vision, including a plan to ensure that the eventual project developed on the Property will be operated at fair and reasonable prices and be widely affordable and available to the users (e.g. Rialto Police Department) of the facilities and services therein. As part of the solicitation process, Tenant determined that Developer has adequate financial resources to design, build, finance, and operate/maintain the Project after the date of this Agreement based on Tenant's rental contribution as described herein.
D. Developer and Tenant previously entered into the Pre -Development Agreement, dated November 15, 2022 (the "PDA"), whereby Developer provided the Phase 1 Services (as defined in the PDA) relating to the Project. Developer will provide the Phase 2 Services (as defined in the PDA) under this Agreement whereby Developer will design and construct the Project, and Tenant may elect to be reimbursed by RIALTO PUBLIC FINANCING AUTHORITY ("Authority") from Bond proceeds in accordance with the Indenture on or before the 60th day after the Bond Closing (as defined in Section 1) for the funds it advanced for the Phase 2 Services and other reimbursable costs, but only in accordance with Internal Revenue Service's regulations.
E. City is the owner and lessor under that certain Site and Facility Lease ("Site Lease"), and pursuant to which Authority leases from the City that certain real property located in the City ("Land"), that is more specifically described in the attached Exhibit A. -1-
F. City desires to construct on the Land a new Police Station which will encompass a two-story concrete police administration building of approximately 50,814square feet, a support building of approximately 11,403 square feet (with final sizing to be determined in the initial project program verification activity of Phase 1), and on -site parking (collectively, the "Building"). The proposed Building is more fully described in the approved Design Development Documents (as defined in Section 1). The design, permitting and construction of the Building is referred to in this Agreement as the "Project."
G. Authority and Tenant (as defined in Section 1) are parties to that certain Lease Agreement dated of even date with the Site Lease ("Lease Agreement"), whereby Tenant has agreed to lease the Premises (as defined in Section 1) at the rent and subject to all of the terms, covenants and conditions set forth in the Lease Agreement.
H. City desires to engage Developer to develop and administer the design, permitting and construction phases of the Project in accordance with the terms and conditions of this Agreement. Developer desires to perform development and construction management services in connection with the construction of the Project in accordance with the terms and conditions of this Agreement. Subject to the terms and conditions hereof, Developer will warrant to achieve Substantial Completion (as defined in Section 1) of the Project no later than the Developer Obligation Date (as defined in Section 1) and for a total price not to exceed the Project GMP (as defined in Section 1).
I. Authority and City understand that Developer will not personally perform any design or construction services. The parties intend for Developer to contract directly and separately with (i) the General Contractor (as defined in Section 1) who is to be engaged to construct the Project, (ii) the Architect (as defined in Section 1) and engineers and related design consultants designing the Project, and (iii) such other Contractors (as defined in Section 1) or consultants who may be engaged to perform discrete elements of design or construction work on the Project to the extent not covered by the GC Contract (as defined in Section 1) or Architect's Agreement (as defined in Section 1). If, during the performance of this Agreement, Developer determines that additional construction service consultants or contractors must be retained in order to meet the terms of this Agreement, the Developer will contract with them directly. The Project and this Agreement are authorized by applicable law, including but not limited to the Infrastructure Financing Act (Govt Code §§5956 et seq.).
J. Developer provided services to City under the PDA, including but not limited to, identifying and analyzing various sources of financing that City could utilize. City analyzed the various financing options and selected, in its sole discretion, to proceed with financing through the Authority, and Developer has assisted and cooperated with City and Authority, and will continue to provide assistance and cooperation, for Authority to structure and obtain financing for the Project. Authority anticipates that financing for the Project will be obtained through the issuance of tax-exempt bonds (the "Bonds") by the Authority . Upon payment in full of the Bonds, the Premises leasehold will automatically revert to Tenant for no additional consideration.
NOW, THEREFORE, to fulfill the foregoing objectives, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer desire to enter into this Agreement and proceed in accordance with its terms. -2-
1. Definitions. As used in this Agreement, the following terms shall have the following meanings:
"ADA" means the Americans with Disabilities Act of 1990, as amended from time to time. "AHJ" means an Agency Having Jurisdiction with respect to the Project, which includes any governmental or quasi -governmental agencies, bodies, authorities and courts having jurisdiction over the Project or any portion thereof, including but not limited to the City. "Allowance" means additional resources included in Developer's estimate to cover the cost of known but undefined requirements for an individual activity, work item, account or sub - account expressly identified as such in Exhibit I. There are no Allowances except as specifically identified in Exhibit D or Exhibit I. When Developer is capable of determining the actual cost associated with the Allowance, an appropriate additive or deductive change order shall be issued as and when necessary as reasonably determined by Developer as further described in Section 9.8. "Architect" means LPA, Inc., the architect for the Project, or any successor architect for the Project.
"Architect's Agreement" means the agreement between Developer and the Architect with respect to the Project.
"Authority" means the Rialto Public Financing Authority, a California joint powers authority, its successors and permitted assigns.
"Bond Closing" refers to the date the Bond proceeds are made available to the Trustee, as defined in the Indenture.
"Bonds" means those tax-exempt bonds to be issued by the Authority for the benefit of the City as more particularly described in Recital F above, from the proceeds of which City intends to pay, among other things, the cost of PHASE 2 Services, the Project GMP, the Financed FF&E, and any bonds issued to refund such Bonds.
"Building" means the new Police Station consisting of a two-story concrete police administration building, support building of approximately 11,403square feet, and on -site parking as described in Recital D to be constructed on the Land. The Building is expected to contain approximately 50,814gross square feet of area, as more fully described in the approved and accepted Design Development Documents, and includes the Tenant Improvements constructed therein. A site plan of the Project showing the Building is attached hereto as part of Exhibit E. "City -Caused Delay" means any period of Critical Path delay in the overall progress of design, finance, construction, and completion of the Project, including Tenant Improvements, that is caused by (a) City -initiated changes to the Construction Documents, (b) City's failure to approve, disapprove, decide, or otherwise respond to Developer in the time indicated in this Agreement for such item with respect to a particular item for which City's response is required hereunder or under the GC Contract or Architect's Agreement, (c) City's failure to deliver plans, information, specifications, or other information within the time frames required under this Agreement, the Project Schedule, or the GC Contract or Architect's Agreement, (d) City's failure -3-
to timely fund Project Costs or Other City Costs, (e) failure of City to cause City provided FF&E or Tenant's Personal Property, if any, to be procured and installed in a timely manner, (f) any interference or other acts or omissions of City, (g) delays caused by Tenant which are not intended to include any period of time provided in the Facilities Lease, the Project Schedule, or this Agreement for City to review and respond to any submission, (h) delays caused by items for which City is responsible, including but not limited to City Deliverables, or (i) Differing Site Conditions not reasonably identified by Developer prior to the date of this Agreement in the exercise of its commercially reasonable due diligence (which the parties have agreed that Developer's due diligence was reasonable based on the reports identified in Exhibit A). In the absence of a particular time frame in the Project Schedule for City to provide plans, information, approvals, etc., City will have five (5) business days to provide such plans, information, approvals, etc. after Developer's written request. However, City -Caused Delay shall not include delay to the extent caused by Developer's failure to provide, within the time frames allowed hereunder, draw requests, architect's certifications, progress completion certifications, copies of change orders and reasonable supporting documentation, shop drawings, schedules, costs, invoices, job progress reports, or any other documents or information which City is entitled to receive hereunder or which is reasonably requested by City in connection with any such decision or response. To facilitate timeliness in City's communications with Developer over matters relating to design or construction of the Project and to minimize the possibility of City -Caused Delay, Developer shall alert City to deadlines for approvals, decisions or other responses that City must provide hereunder, including, among other methods, attachment of "deadline cover sheets" on any submissions to City that require response by a particular deadline or distribution of weekly calendars that show deadlines imposed on City. If Developer at any time believes that an instance of City -Caused Delay has occurred that has directly caused or will directly cause an increase in Project Costs or extension of the Developer Obligation Date, then Developer shall send a written notification to City in accordance with Section 8.4. Any disputes between Developer and City over delays or Project Costs attributable to City -Caused Delay shall not be a reason to stop or delay construction of the Project and shall be resolved by the parties as expeditiously as possible, either by mutual agreement of the parties or in accordance with the dispute resolution mechanisms described in Section 24 hereof.
"City Contingency" means a fund to cover cost growth during the Project used at the discretion of the City usually for costs that result from City directed changes or City -Caused Delays. The amount of the City's Contingency will be set by the City and will be included as a line item in the Project GMP (below the line), but will be for City's exclusive use. City Contingency will be added to the GMP amount provided by the Developer, the sum of which will be the full contract price for design, permitting and construction. Markups for insurance, bonds, fee, taxes, and general conditions will be applied by the Developer at the time that City Contingency is used. Any City Contingency not utilized shall revert to the City after Project completion. City may or may not elect to include a City Contingency, and may elect the amount of any City Contingency. City's election to not include a City Contingency or election to have an insufficient City Contingency is at City's sole risk. The City Contingency will be treated like an Allowance (but to be used exclusively by the City), and the amount of the City Contingency (which is determined solely by the City in its sole discretion) will not act as a limit on costs that City is required to pay under this Agreement.
-4-
"City Deliverables" means and refers to (a) all reviews and approvals by City required under this Agreement, (b) City's responses to questions from Developer required under this Agreement, (c) City's design and installation of its information technology in accordance with the Project Schedule, (d) City providing the Tenant Personal Property in accordance with the Critical Path Project Schedule, and (e) any FF&E or Tenant's Personal Property that City desires that is not included in the approved Construction Documents as Developer's responsibility in accordance with the Project Schedule.
"Commencement of Construction" means the date City executes and delivers to Developer the written Notice to Proceed (Construction). "Commodities" mean fmished goods, products, or materials that are purchased (directly or indirectly) by Developer or General Contractor that are intended to be installed in or incorporated into the work including, without limitation, the Financed FF&E. "Construction Contracts" means collectively (i) the GC Contract, (ii) the subcontracts between General Contractor and its Trade Contractors, and (iii) all other contracts for construction services entered into between Developer and any Contractor, for construction of any portion of the Project not covered by the GC Contract.
"Construction Documents" means the Construction Drawings and Detailed Specifications approved by City, for construction of the Project, including technical drawings, schedules, diagrams, plans and specifications setting forth in detail the requirements for construction of the Project and providing information customarily required for the use of the building trades.
"Construction Drawings" means Drawings setting forth the requirements for the construction of the Project approved by City. As used herein, "Drawings" include all graphic and pictorial documents depicting the design, location and dimensions of the elements of the Project (including Tenant Improvements) and include plans, elevations, sections, details, schedules and diagrams for the Project, all of which shall be consistent with the Project Requirements.
Construction Drawings may, if applicable, consist of separate Drawings for the Building and Tenant Improvements.
"Contract Documents" means this Agreement (including all exhibits attached hereto), the Construction Documents, the Construction Contracts and the other documents identified as Contract Documents in the GC Contract and all modifications and amendments to the foregoing issued after the date of execution of this Agreement, including amendments and change orders. "Contractors" means the General Contractor, any Trade Contractors and their subcontractors (of any tier), and any other construction trade contractors with whom Developer enters into Construction Contracts for the Project.
"Costs Not to Be Reimbursed" means, except as specifically provided in Section 11 hereof (relating to Developer's Fixed Fee and Developer's Fixed Overhead) or as set forth in Exhibit D, (a) salaries or other compensation of Developer's personnel normally situated at Developer's principal office or branch offices; (b) except as otherwise provided in the Construction Contract, salaries or other compensation for any of Contractor's personnel normally situated at -5-
such Contractor's principal office or branch offices; (c) salaries or other compensation for any officer of Developer or Contractor; (d) expenses of Developer's or Contractor's principal office; (e) overhead or general expenses, except as expressly provided in the definition of Project Costs; and (f) Project Costs in excess of the Project GMP.
"Costs Resulting from City -Caused Delay" means any increase in costs of constructing the Project to the extent resulting from City -Caused Delay. Where additional costs are incurred as a result of a combination of City -Caused Delay and failure of Developer to provide, within the time frames allowed hereunder, draw requests, architect's certifications, progress completion certifications, copies of change orders and supporting documentation, shop drawings, schedules, costs, invoices, job progress reports, or other documents or information which City is entitled to receive hereunder or which is reasonably requested by City in connection with any such decision or response required hereunder, then Costs Resulting From City- Caused Delay shall be only the portion of such costs attributable to City -Caused Delay. "Critical Path" means the sequence of Activities in a network analysis such that the total duration equals the sum of the durations of the individual Activities in the sequence. There is no time leeway or slack (float) in Activities along the Critical Path (that is, if the time to complete one or more Activities in the Critical Path increases, the total production time increases). The Project Schedule shall include the Critical Path. As used in this definition, the term "Activities" refer to basic elements of work, or tasks that must be performed in order to complete the Project.
Activities may occur over time.
"Design Development Documents" means drawings and related specifications that are a consistent development of the Schematic Documents and further define and describe all important aspects of the Project and includes measured CAD drawings at a scale required to convey and describe the design intent. The approved and accepted Design Development Documents will serve as the basis for the Construction Drawings as approved by the City. The Design Development Documents were previously prepared under the PDA and have been approved by City, and the approval acknowledges that the Design Development Documents are in conformance with the Schematic Documents. An index of all of the approved and accepted Design Development Documents as of the date of this Agreement is included in Exhibit E. "Detailed Specifications" means all written detailed requirements for materials, equipment, construction systems, standards and workmanship for the construction of the Project. "Developer" means Griffm / Swinerton, LLC, a Delaware limited liability company, and its successors and permitted assigns hereunder.
"Developer Contingency" means the Developer contingency line item set forth in Exhibit D which will be set formulaically at time of establishment of the GMP to be a factor of 5% of all Project Costs. The Developer Contingency is a fund to pay Project Costs during the Project which are not the City's responsibility. Developer may use the Developer Contingency at the reasonable discretion of Developer for Project Costs that fall within any of the following categories: (a) voluntary acceleration, (b) costs that are not recovered from sureties of retaining replacement or supplemental Contractors, (c) gaps in Trade Contractors' scopes of work, including interfacing omissions between and among the work categories, (d) Unavoidable Delays, (e) delays and costs -6-
attributable to Developer, excluding costs arising from Developer's gross negligence or willful misconduct, (f) labor disputes, (g) material or equipment price changes, (h) costs related to the coordination of modifications, amendments or updates to the completed Construction Documents that are required by an AHJ or otherwise at no fault of either party to this Agreement, excluding costs arising from errors or omissions that are a breach of the Architect's standard of care, (i) correcting defective or non -conforming work that Developer cannot reasonably recover from the responsible Trade Contractor(s), or (j) settling the contractual claims of Contractors when doing so is deemed by the Developer to be in the best interests of the Project to keep the Project progressing, subject to such settlement amounts being within limits of the Project GMP. The foregoing categories are referred to as the "Pre Approved Developer Contingency Uses." Developer may use the Developer Contingency for Project Costs that do not fall within the Pre - Approved Developer Contingency Uses only with the consent of the City, which consent will not be unreasonably withheld. The amount of the Developer Contingency will be a separate line item in Exhibit D. Any unused Developer Contingency, at the completion of the Project, will be subject to the terms of Section 12.7.
"Developer Obligation Date" means the scheduled date for issuance of the Certificate of Substantial Completion as set forth in the Project Schedule attached as Exhibit F, as it may be extended pursuant to this Agreement. The Developer Obligation Date shall be extended day -for - day to the extent (a) City has not issued its Notice to Proceed (Construction) in accordance with the Project Schedule, (b) of City -Caused Delays and (c) of Unavoidable Delays. "Developer's Fixed Fee" means the fixed fee to be paid by City to Developer pursuant to Section 11.1 and subject to the terms and conditions set forth in Sections 7.2, 11 and 12 of this Agreement for Developer's Project related program management, development management, and construction management services to be performed by Developer under this Agreement. This fee is exclusive of any fees or costs of Developer's General Contractor, the Architect or other design professionals, consultants, Contractors, laborers, materials, equipment, or Reimbursable Expenses, and which amounts are included as Project Costs within the Project GMP. In addition to Developer's Fixed Fee and Developer's Fixed Overhead, Developer is also entitled to share in the unused Developer Contingency as set forth in Section 12.7. Developer's expenditure of Developer's Contingency will be deducted from the Developer's Contingency line item and, therefore, will not be included in any final shared participation in unused Developer's Contingency.
"Developer's Fixed Overhead" means the fixed overhead fees to be paid by City to Developer pursuant to Section 11.1 and subject to the terms and conditions set forth in Sections
7.2, 11 and 12 of this Agreement for Developer's Project related program management, development management, and construction management services to be performed by Developer under this Agreement. This fee is exclusive of any fees or costs of Developer's General Contractor, the Architect or other design professionals, consultants, Contractors, laborers, materials, equipment, or Reimbursable Expenses, and which amounts are included as Project Costs within the Project GMP. In addition to Developer's Fixed Fee and Developer's Fixed Overhead, Developer is also entitled to share in the unused Developer Contingency as set forth in Section
12.7. Developer's expenditure of Developer's Contingency will be deducted from the Developer's Contingency line item and, therefore, will not be included in any final shared participation in unused Developer's Contingency.
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"Differing Site Conditions" are: (a) subsurface or latent physical conditions at the Project Site differing materially from those conditions indicated from a reasonable evaluation in accordance with industry custom or (b) unknown or unforeseen physical conditions at the Project Site of an unusual nature, differing materially from conditions normally encountered and generally recognized as inherent in work of the nature provided for in the Construction Documents. The parties acknowledge that they have agreed upon the reasonable due diligence that Developer is to undertake pursuant to the PDA. Therefore, Differing Site Conditions are, as defined above, but only to the extent that the conditions were not revealed by the mutually agreed upon due diligence performed by Developer. Developer is responsible for (and may not make a claim for) any conditions identified by the due diligence performed by Developer. "FF&E" means furniture, fixtures, equipment and movable property. "Financed FF&E" means all furniture, fixtures, equipment and movable property as set forth in the Detailed Specifications, the costs of which will be (a) included in Project Costs, and (b) financed through the Bonds. It is the intent of City and Developer that they will cooperate to make any decisions on Financed FF&E such that the total cost of the Financed FF&E will not exceed the line item for Financed FF&E in Exhibit D for the Financed FF&E. If City adds items to the Financed FF&E or selects items that are more expensive than the aggregate budgeted amount for the Financed FF&E, then such additional costs of Financed FF&E in excess of the budgeted line item for Financed FF&E shall be deemed to be an Other City Cost. The Financed FF&E will be designed, provided and installed in accordance with the Detailed Specifications and Developer shall have no other obligations in connection therewith. "Final Acceptance" means the City's written approval and concurrence that certain events, more fully defined in Section 12 of this Agreement, have occurred prior to Final Payment being made.
"Final Completion" is the date when General Contractor has completed all construction activities required by the Contract Documents, excluding executory warranty obligations. City and Developer will complete and sign the Final Completion form attached as Exhibit J in a timely manner.
"Final Payment" means payment to Developer following Final Acceptance of the Project pursuant to Section 12 of this Agreement.
"Financing Costs" means all financing and other related costs authorized to be paid pursuant to the Indenture in connection with the issuance of the Bonds. "GC Contract" means the agreement between Developer and the General Contractor for construction of the Project through the delivery method of Cost Plus with a Guaranteed Maximum Price.
"General Contractor" means Swinerton Builders, the General Contractor for the Project selected by Developer and any replacement or successor general contractor. The General Contractor is providing its professional services for a fixed fee. Developer may, at its election, replace the General Contractor with a replacement general contractor with the consent of City, -8-
which consent will not be unreasonably withheld, conditioned, or delayed provided that there is no increase to the Project Cost or to the City.
"Guaranteed Maximum Construction Price" means the maximum cost for construction of the Project, as guaranteed by the General Contractor pursuant to the terms of the GC Contract. "Guaranteed Maximum Price of Project" and "Project GMP" mean and refer, interchangeably, to the amount set forth in Exhibit D to be paid by City for Project Costs. The Guaranteed Maximum Construction Price is just one element of the Guaranteed Maximum Price of Project. A detailed description of all Project Costs included in the Project GMP, broken down by line item and category, is set forth in Exhibit D. Where applicable, the terms "Guaranteed Maximum Price of Project" and "Project GMP" shall each include adjustments thereto made in accordance with this Agreement. The Guaranteed Maximum Price of Project specifically excludes the following costs (all of which are City's responsibility): (1) City's Other Costs; and (2) costs associated with work that is not included in the Construction Documents. Additionally, the Project GMP is subject to the express qualifications, exclusions and Allowances set forth in Exhibit I.
Nothing in this Agreement or its exhibits is intended to create a line item guaranty (only the Project GMP is guaranteed), and Developer may, in its sole and absolute discretion, allocate any savings from any individual line item or the Developer Contingency, except Allowances, to any Project Costs for any Project work required from the Contract Documents for the Project, except that Developer must obtain City's consent to use Developer Contingency for Project Costs that are not included in the Pre -Approved Developer Contingency Uses. "Indenture" means the indenture pursuant to which the Authority will issue the Bonds, a copy of which shall be provided to Developer by City at Bond Closing. "Initial Draw" refers to Developer's first application for payment of Project Costs, which shall not occur before Bond Closing.
"Land" means the real property located in the City of Rialto, San Bernardino County, California, more specifically described on Exhibit A hereto. "Laws" means any constitution, statute, ordinance, regulation, rule, resolution, judicial decision, administrative order or other requirement of any federal, state, county, municipal or other governmental agency or authority having jurisdiction over the parties or the Premises, including without limitation, any regulation or order of a quasi -official entity or body (e.g. board of fire examiners or public utilities) and all rules, laws and regulations issued thereunder, as the same may be amended from time to time.
"Lease Agreement" means the Lease Agreement to be executed between City for occupancy of the Project.
"Notice to Proceed (Construction)" means the notice to be delivered in writing by City to Developer, at or following the Bond Closing, whereby City authorizes the Commencement of Construction.
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"Notice to Proceed (Design)" means the date of execution of this Agreement by the City which shall serve as authorization for Developer to continue preparing the Design Development Documents and to prepare the Construction Documents.
"Other City Costs" means all costs that are stated in this Agreement to be the responsibility of City. Other City Costs shall include, without limitation, Tenant's Personal Property and any taxes thereon, any costs of Financed FF&E to the extent that City's decisions in adding FF&E or selecting FF&E causes the total cost of the Financed FF&E to exceed the FF&E line item in Exhibit D, Financing Costs and any other costs associated with the Bonds and all improvements thereon (including title, escrow and recording costs), debt service on the Bonds, attorneys' fees and costs incurred by City, brokerage and leasing commissions or finders' fees incurred by City, property taxes and assessments of any nature with respect to the Land or any improvements located on the Land, costs associated with any licensee, subtenant or other occupant of the Land, expenses resulting from City -Caused Delays or Unavoidable Delays (including, without limitation, expenses incurred in connection with a casualty) except as otherwise provided in Section 7.2, consulting fees for any consultants engaged by Authority, Tenant or Trustee as permitted under Section 9.3, costs associated with any lawsuit, claim or other action pending or threatened against Authority or City, except as otherwise provided in Sections 13, 15 and 24. "Permits" means all land use approvals, permits and approvals to be obtained by Developer from the AHJ that are required for construction of the Project. "Permitted Use" means the intended use of the Project by Tenant for its building, parking and any other lawful use consistent with the provisions of the Lease Agreement and maintaining the exclusion of interest on any obligation issued to finance the Project where such interest was intended to be excludable from taxpayer gross income.
"Premises" means the entirety of the Land and the Building that are to be leased to Tenant under the Lease Agreement.
"Prequalification Questionnaires" are questionnaires for pre -qualifying certain trade Contractors for the Project developed by Developer and/or General Contractor and approved by the City in compliance with all applicable Requirements of Laws prior to any actual pre - qualification of contractors, bid solicitation or construction. "Project" means the total design, permitting and construction, and other professional services, and all labor, materials and equipment used or incorporated in such design and construction of the Building and the Tenant Improvements to be constructed within the Building, but specifically excludes any work not included in the Contract Documents (e.g., Tenant provided FF&E, Tenant's Personal Property, or Tenant provided information technology). The Project shall be consistent with the approved Project Requirements. Notwithstanding the foregoing or anything to the contrary contained in this Agreement, the Financed FF&E will be designed, provided and installed in accordance with the Detailed Specifications and Developer shall have no other obligations in connection therewith or in connection with Tenant's Personal Property. - 10 -
"Project Application for Payment" means the procedures by which requests for payment for Project Costs and other costs shall be made in accordance with Section 9 of this Agreement.
The Project Application for Payment will be in the form of Exhibit N. "Project Costs" means all direct and indirect costs incurred by Developer for any Project work required by the Contract Documents for the completion of the development, planning, designing, engineering, permitting, financing, estimating, bidding, and constructing of the Project, including, without limitation, all labor, materials, equipment, Financed FF&E, Reimbursable Expenses, Developer Fixed Fee, Developer Fixed Overhead, Developer Contingency, Architect costs, General Contractor costs, Contractor costs, consultant and professionals costs, bond costs, warranty costs, close-out document costs, and taxes.
Notwithstanding anything to the contrary herein, Project Costs (including, without limitation, the Tenant Improvements) do not include and Developer shall have no responsibility for (a) Tenant's Personal Property and any taxes thereon (which shall be paid by Tenant at its sole cost and expense); (b) City Contingency; (c) Costs Resulting from City -Caused Delay; (d) any increase in the cost of the Project resulting from City Contingency use; (e) real property taxes and assessments with respect to the Land and the improvements thereon; (f) Other City Costs; (g) maintenance or operation of the Building after Substantial Completion of the Project; or (h) costs associated with Tenant vacating the land, if any, including temporary office and parking arrangements for Tenant workers or visitors.
"Project Fund" means the fund of that name established under the Indenture for the purpose, among others, of paying Project Costs.
"Project Requirements" means the approved Design Development Documents, Requirements of Law and any other requirements for the Project specifically agreed to by City and Developer.
"Project Schedule" means the schedule for development, design, and construction of the Project as set forth on attached Exhibit F to this Agreement, as revised from time to time in accordance with this Agreement; provided, however, that in no event shall the Project Schedule provide for Substantial Completion of the Project to occur later than the Developer Obligation Date.
"Punch List" means a list of items required to be completed prior to Final Acceptance that are minor items which do not affect City's ability to lease the Premises to Tenant and do not affect Tenant's ability to use the Premises for the Permitted Use. "Reimbursable Expenses" means direct and indirect costs (e.g., submittal exchange, etc.) incurred by Developer in developing, planning, designing, financing, and constructing the Project pursuant to this Agreement which costs are not included in other line items in Exhibit D, but which amounts are included within the Guaranteed Maximum Price of Project and are considered to be Project Costs. Reimbursable Expenses are paid at cost without markup. "Requirements of Law" means all requirements relating to land and building construction (including those specifically applicable to Tenant's contemplated use of the Premises), including, without limitation, if and to the extent applicable, planning, zoning, subdivision, environmental,
air quality, flood hazard, fire safety, accessibility, public contracting and other governmental approvals, permits, licenses and/or certificates as may be necessary from time to time to comply with all the foregoing and other applicable statutes, rules, orders, regulations, laws, ordinances, and covenants, conditions and restrictions, which now apply to and/or affect the design, construction, existence, intended use, operation and/or occupancy of the Land, the Premises or any part thereof.
"Retention" means a percentage of the amount due to the Developer on a Project Application for Payment for a progress payment, that is deducted from the amount due and retained by City.
"Retention Payment" means the City's payment to Developer, following Substantial Completion, of the Retention (or a portion thereof) being held by City. "Sale of the Bonds" means execution and delivery by Authority, City and a bond underwriter of an agreement providing for the purchase and sale of the Bonds on terms consistent with the terms of the Indenture and with no conditions to the underwriter's obligation to pay for and accept delivery of the Bonds other than those conditions contained in such agreement among Authority, City and the underwriter.
"Savings" means the difference (if a positive number) obtained by subtracting (a) the total aggregate sum of allowed Project Costs from (b) the authorized Project GMP (as revised pursuant to the terms of this Agreement but less any unused Developer Contingency, as unused Developer Contingency is subject to Section 12.7). Developer will separately track all Savings (whether inuring from the buy-out process, from cash discounts, or otherwise). With each application for payment, Developer will provide City with its accounting of these Savings, if any. Developer may, in its sole discretion, allocate Savings between and among its line items for any Project Cost; provided that Developer advises City in writing of its use, and provided further that Developer may not, in any event, allocate any Savings to increase its Developer Fixed Fee, Developer Fixed Overhead, or its General Contractor's fixed fee. Until Final Completion, any Savings are fully available to Developer to pay for any Project Costs including Developer Contingency costs, but excluding increases in the Developer Fixed Fee or Developer Fixed Overhead (except to the extent that Developer is entitled to a share of Developer Contingency under Section 12.7). "Schedule Update" means a periodic update of the Project Schedule. The Schedule Update shall reflect Developer's assessment of completion. Developer shall identify any events that will delay the completion of an interim milestone or the completion of the overall Project in the monthly Schedule Update, to the extent known at the time. City must submit written notice to Developer within five (5) business days of receipt of the Schedule Update stating that the City objects to the Schedule Update (and provide written objections to Developer within a reasonable time after the City's notice of objection); failure of City to timely submit a written notice objecting to the Schedule Update will be deemed City's acceptance of the monthly Schedule Update, and the monthly Schedule Update shall become the current accepted Project Schedule. Any request for an extension of the Contract Time must be based on the accepted Project Schedule. - 12 -
"Schedule of Values" means a detailed statement outlining the portions of the Project GMP that allocates values for the various parts of the Work and is also used as the basis for submitting and reviewing Project Applications for Payment. "Schematic Documents" means drawings and related outline specifications establishing the general scope, conceptual design, design intent and scale and relationship among the components of the Project. The Schematic Documents were previously prepared under the PDA and have been approved by City.
"Separate Contractors" means the contractors, if any, retained by City to perform any work on the Project that is not included in Developer's scope of work, including their trade contractors of any tier.
"Special Testing and Inspections" means special testing and inspections for structural components (e.g., earthwork compaction, shoring, concrete, reinforcing steel, CMU, welding, and other structural related installed systems), as set forth in Exhibit K. "Substantial Completion" or "Substantial Completion of the Project" means that the Project has been constructed in substantial accordance with the Contract Documents (with the exception of any Punch List items) and AHJ has issued a temporary or final certificate of occupancy or other approval (e.g., final building inspection by building officials) sufficient for initial occupancy of the Building such that City is permitted to and could occupy the Building for its Permitted Use, including installation of the Financed FF&E identified in the Detailed Specifications; provided, however, if the delay in the issuance of the certificate of occupancy or other approval necessary to allow occupancy is attributable to an obligation of City or the delay is caused by an Unavoidable Delay, then this condition shall be deemed satisfied. A "Certificate of Substantial Completion" in the form attached as Exhibit L signed by the Architect shall evidence this date; the date will not be altered by the Architect making subsequent modifications to or reissuing the Certificate of Substantial Completion (e.g., striking "Tentative" or adding items to the Punch List) to address City concerns regarding the work to be completed. "Substantially Complete" or "Substantially Completed" means that the Project, or portion thereof, has achieved Substantial Completion.
"Tenant" means City of Rialto, a State of California municipal corporation, and its successors and permitted assigns as tenant under the Lease Agreement. "Tenant Improvements" means any improvements to the interior of the Building as specifically described in the Construction Documents to be completed by Developer. "Tenant's Personal Property" means Tenant's furniture, equipment, and movable personal property placed in the Premises. Tenant shall provide and install Tenant's Personal Property at Tenant's sole cost and expense. Tenant's Personal Property does not include Financed FF&E.
"Title Policies" shall mean the leasehold policy of title insurance issued to Authority upon its acquisition of a leasehold interest in the Land pursuant to the Site and Facility Lease - 13 -
("Authority's Title Policy") and the lender's policy of title insurance issued to the Trustee upon the recording of the Lease Agreement ("Lender's Title Policy"). "Trade Contractor" shall mean construction trade contractors providing labor, materials, and/or services with whom Developer or its General Contractor enters into Construction Contracts. "Trustee" shall mean a state banking corporation, national banking association or other financial institution with trust powers selected by Authority to serve as the bond trustee under the Indenture or any duly authorized successor thereto appointed pursuant to the Indenture. "Unavoidable Delays" means any delay in the performance by Developer or the General Contractor of its obligations with respect to construction of the Project caused by strikes or labor disputes (other than those caused by Developer's negligent acts, omissions, or failure to negotiate in good faith), acts of God, unavoidable casualties, adverse weather conditions which prevent or delay Critical Path construction activities as and when scheduled by the Contractors, lack of power to the Project Site, acts of terrorists, delays by AHJ (including, but not limited to, unanticipated delays in providing inspections or approvals by AHJ), governmental embargo restrictions, pandemic related delays (including unavoidable supply -chain issues), governmental declared emergency or other governmental action, or other causes beyond the reasonable control of Developer or the General Contractor, which, after the exercise of due diligence to mitigate the effects thereof, delay design or construction of the Project. Unavoidable Delays are not delays resulting from (a) Developer's or the General Contractor's failure to comply with the terms and provisions of this Agreement or the GC Contract, (b) increased prices, or (c) unavailability of funds, provided the Project Costs (and all other funds payable by City under this Agreement) are timely paid by City in accordance with Section 9 of this Agreement. Unavoidable Delays will entitle Developer and the General Contractor to an extension of the Developer Obligation Date, but will not entitle Developer to additional compensation except as provided in Section 23.7.
Nothing contained herein shall prevent Developer from allocating the Developer Contingency to increased costs of constructing the Project caused by Unavoidable Delays. Any disagreements with regard to Unavoidable Delays that cannot be resolved by Developer and City shall be resolved in accordance with Section 24 hereof, but (subject to City's continued funding of the Project Costs up to the amount of the Project GMP) work shall continue pending resolution of such dispute. "Warranty Period" shall mean that period commencing on the date of Substantial Completion of the Project and expiring three hundred sixty five (365) calendar days thereafter.
2. Development of the Project.
2.1 Guaranteed Maximum Price of Project. City hereby retains Developer and Developer shall, in accordance with the terms of this Agreement, develop and administer the design, permitting and construction phases of the Project in accordance with the terms and conditions of this Agreement. Subject to the terms of this Agreement, and provided the Project Costs are paid as and when due in accordance with Section 9 of this Agreement, Developer warrants Substantial Completion of the Project (a) constructed in a good and workmanlike manner, (b) in substantial accordance with the Contract Documents, (c) on or before the Developer Obligation Date, (d) for a price not to exceed the Project GMP (excluding any components of the Project that are not Project Costs), and (e) free and - 14 -
clear of all liens. Developer is responsible for paying Project Costs exceeding the Project GMP.
2.2 City Contingency Costs. City Contingency costs shall not be considered Project Costs but shall be included in the Project GMP for City's use and implemented by the Developer.
2.3 Diligent Efforts; Relationship of the Parties. Developer agrees that in providing the services set forth in this Agreement, Developer shall use its diligent efforts and shall furnish its professional skill and judgment and shall cooperate with, coordinate, and require that the General Contractor, Architect, all other Contractors, all other engineers, design consultants, managers and other persons retained in connection with the design, permitting, development and construction of the Project cause Substantial Completion of the Project for the Project GMP in an expeditious and economic manner, and otherwise in a good and workmanlike manner and in substantial accordance with the Contract Documents, on or before the Developer Obligation Date, free and clear of all liens (provided the Project Costs are paid as and when due in accordance with Section 9 of this Agreement). Developer shall perform its services in accordance with the terms of this Agreement, including, without limitation, all services to be provided by Developer as described in Section 5 herein. Developer shall not, itself, perform any construction services in connection with this Agreement, as all construction services will be performed by the Contractors, but Developer is responsible for the construction services being properly and timely performed.
2.4 Mutual Cooperation; Liability of City. Developer and City shall fully and in good faith cooperate with each other to accomplish each of the activities provided herein. City shall have no liability or responsibility whatsoever with respect to the activities to be performed by Developer herein, except to timely pay the Project Costs as and when due and to timely perform all obligations of City set forth in this Agreement pursuant to the terms and conditions contained herein.
2.5 Term. The rights and obligations of the Developer and City hereunder shall commence on the date of execution of this Agreement and shall continue until expiration of the Warranty Period.
2.6 Scope of Work. Developer shall perform, or cause to be performed, all work as required by, and in accordance with, the Contract Documents. Developer shall provide and furnish, or cause to be provided and furnished, all labor, project management, supervision, funding administration, planning, scheduling, materials, testing, commissioning, inspection, quality control, tools, equipment, services and all transportation services in adequate quantity and quality to accomplish completion of the work as specified as necessary within the time period set forth. The work shall conform to the Construction Documents and all applicable codes, regulations, laws, etc. referenced in the Contract Documents or by industry standard, including Division 01 of the Detailed Specifications. Throughout this Agreement, there are references to both Developer and General Contractor. When a provision provides that General Contractor is to perform some obligation under this Agreement, it is done in order to identify a specific obligation that - 15 -
General Contractor will be performing; however, it is agreed that Developer is responsible for all of General Contractor's obligations under this Agreement. Therefore, any reference in this Agreement to General Contractor is for convenience, but it is understood and agreed that General Contractor is not a party to this Agreement and the obligations in this Agreement are solely those of Developer and City. Thus, if a provision states that General Contractor will do or refrain from doing some act, General Contractor will do so but Developer is liable to City if General Contractor violates the provision.
2.7 Services. Developer will (a) provide general administration of the Project; (b) manage and coordinate the General Contractor and Consultants; (c) manage and coordinate the processing of the Construction Documents for the Project; (d) manage bidding all components of construction for the Project, including requiring that any competitive bidding requirements applicable to the Project are complied with in accordance with the bidding requirements of this Agreement and any City approved procurement plan (including the City -approved procurement plan attached as Exhibit P), pre -qualification or best value process; (e) enter into a contract with General Contractor to construct the Project, oversee the Contractors, and to complete the Project Work in accordance with the Construction Documents; and (f) manage and coordinate the services provided by its General Contractor, for the purpose of causing the Project to be completed within the Project GMP, in accordance with the Construction Documents, and within the time periods set forth in the Project Schedule.
3. Project Financing.
3.1 Issuance of Bonds. City intends to cause the issuance of Bonds by Authority in one series for sale on one date in a principal amount sufficient to pay the Project Costs, Financing Costs and other costs payable pursuant to the terms of the Indenture.
3.2 Disbursal of Proceeds. A portion of the proceeds from the sale of the Bonds in an amount sufficient to pay the Project GMP shall be deposited into the Project Fund held by the Trustee and shall be used to pay Project Costs and other costs in accordance with the terms of the Indenture and this Agreement.
4. Project Design. Developer shall cause design services to be performed by qualified and licensed (as applicable) architects, engineers and other professionals retained by Developer, and paid as part of the Project Costs.
4.1 Selection of Development Team for Project. Developer shall have the right in its reasonable discretion with City's Representatives approval to select professionals as necessary or desirable for the design, permitting, construction, and development of the Project. Except as otherwise provided in this Agreement, all amounts paid to the entities outlined above and any others hereinafter engaged by Developer in connection with the performance of its duties and responsibilities under this Agreement shall be part of the Project Costs and Project GMP.
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4.2 Design Contracts. Developer has entered into the Architect's Agreement with the Architect. Developer may enter into contracts with other design professionals such as waterproofing, Special Testing and Inspections, etc.
4.3 Assignment of Certain Agreements. Upon written notice from the Trustee to Developer of the occurrence of an Event of Default under the Indenture, Developer shall assign this Agreement, the Architect's Agreement and the GC Contract, together with such other Construction Contracts as the Trustee may request, to Trustee for such time as the Event of Default in the sole judgment of the Trustee remains uncured.
4.4 Project GMP Breakdown. Exhibit D sets forth by line item and category all Project Costs, including the Developer Contingency, Developer's Fixed Fee, and Developer's Fixed Overhead.
4.5 Drawings. Under a separate contract, Developer has caused the Architect to prepare the Design Development Documents, which are complete and have been approved by City. Developer shall cause the Architect to prepare the Construction Drawings and Detailed Specifications for the Project, except where noted (e.g., design/build and deferred approval elements) for City's approval. The intention of the parties is to cooperate in good faith to provide a completed design which meets all Requirements of Law and is consistent with all Project Requirements and the building quality reflected therein. The Construction Drawings and Detailed Specifications for the Project shall include, at a minimum, all architectural services set forth under Basic Services in the Architect's Agreement and such other architectural services as may be necessary to provide Construction Documents for the Project. The Construction Drawings and Detailed Specifications will be prepared in accordance with the approved Design Development Documents.
4.6 LEED Certification. The Parties have determined not to seek a Leadership in Energy and Environmental Design ("LEED") certification for the Project.
4.7 City's Review. City may participate in all design meetings with Developer, Architect, and other design professionals as appropriate during the course of the development of the Construction Documents in order to facilitate the approval of such Construction Documents in accordance with the terms of this Agreement. City shall promptly review Exhibit D and all Construction Drawings and Detailed Specifications submitted in accordance with this Agreement and shall give Developer written notice within the time frame for such decision in accordance with the Project Schedule (or if no such time is provided in the Project Schedule then within five (5) business days following its receipt of Exhibit D and/or Construction Drawings and Detailed Specifications) of its approval or disapproval thereof, specifying in the case of its disapproval, each specific reason therefor. City shall have the right to disapprove such Construction Drawings and Detailed Specifications which (a) do not meet the Project Requirements, (b) do not comply with Requirements of Law, (c) with respect to Drawings, are not consistent developments of the previous drawings approved by City, or (d) propose changes in work or materials that would result in a material change in appearance or diminution in quality of the Project.
The parties acknowledge that the Construction Documents are intended to add additional - 17 -
detailing to the approved Design Development Documents, and are not intended to change the design intent. Consequently, City may object or comment on the Construction Documents only to the extent that they are inconsistent with or were not previously included in the approved Design Development Documents, or the comments are for non- material changes (i.e., changes that do not increase Developer's costs or time). If City requests changes to the Construction Documents that are material changes from the Design Development Documents, City will be responsible for paying for the additional costs (design and construction) resulting therefrom and the time required for the changes will be a City -Caused Delay. If no written objections or comments are received by Developer from City within such the applicable time period, then the submittals shall be deemed approved.
City's Representative and Tenant will have twenty (20) business days to review and approve the Construction Documents. The parties acknowledge that Developer will concurrently submit the Construction Documents for building department plan check during the City's review. City will review the Construction Documents revised after the first building department plan check and provide written comments or approval to Developer within five ten (5) business days of receipt from Developer. If subsequent reviews are necessary, City will review resubmitted plans within five (5) business days for the second review, and five (5) business days for a third and final review. If City fails to provide written comments or approval within the above time frames, then City will be deemed to have approved the Construction Documents.
4.8 Resubmittals. If objections or comments are submitted in writing within the time frame and in accordance with the requirements set forth in the preceding subsection, Developer shall cause the Architect to make changes in the Construction Drawings and/or Detailed Specifications consistent with reasonable objections or comments made by the City and shall resubmit the same to City in accordance with the foregoing schedule for further review. The process of resubmittal and review shall continue until the submittals have been approved by all the parties. The final Construction Drawings and Detailed Specifications setting forth in detail the requirements for the construction of the Project which have been approved by City are called the Construction Documents.
There shall be no material change in the Construction Documents except as set forth in Section 8 below.
4.9 Permit and Construction Documents. Developer shall cause the Architect and other design professionals to prepare Construction Documents as required for submittal of the Permits to the AHJ(s) in accordance with Section 6 hereof, and as required for construction of the Project by the Contractors.
5. Construction Management Services. Developer shall, through its General Contractor, provide City with all construction administration and construction management services reasonably necessary or desirable to cause Substantial Completion of the Project on or before the Developer Obligation Date, all in a good and workmanlike manner and in substantial accordance with the Contract Documents, including, without limitation, the following:
5.1 Preconstruction Phase. The Preconstruction Phase is the time period from the execution of this Agreement until the Commencement of Construction. During the Preconstruction Phase, Developer will have the following duties:
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(a) Design: Developer shall review all design work done by Architect and other design professionals for the design and development of the Project. Developer shall expeditiously review design documents during their development and advise City on proposed site use and improvements, selection of materials, building systems and equipment and methods of Project delivery. Developer shall provide recommendations on relative feasibility of construction methods, availability of materials and labor, and time requirements for procurement, installation, construction and factors related to construction costs including, but not limited to, costs of alternative designs or materials, budgets and possible economics.
(b) Schedule: Developer shall prepare and periodically update the Project Schedule for City's acceptance. Developer shall obtain the Architect's approval for the portions of the preliminary Project Schedule relating to the performance of their services. Developer shall coordinate and integrate the Architect's services into the Project Schedule and Developer's and City's responsibilities with anticipated construction schedules, highlighting critical and long lead time items.
(c) Constructability: Developer shall consult with City and Architect regarding the Construction Documents and make recommendations whenever design details adversely affect constructability, cost or schedules. (d) Temporary Facilities: Developer shall require that the General Contractor establishes the assignment of responsibilities for temporary Project facilities and equipment, materials and services for common use of the Contractors.
Developer shall verify that such requirements and assignment of responsibilities are included in the proposed Contract Documents.
(e) Categories of Work: Developer shall require that the General Contractor determines the division of the Project into individual contracts for various categories of work, including the method to be used for selecting Trade Contractors and awarding Construction Contracts. Developer shall require that the General Contractor reviews the Construction Documents as required to provide that: (1) the work of the Contractors is coordinated; (2) all requirements for the Project have been assigned to the appropriate Construction Contract; (3) the likelihood of jurisdictional disputes has been minimized; and (4) proper coordination has been provided for phased construction. (f) Construction Schedule: Developer shall prepare a Project Schedule providing for the components of the work and shall consult with the General Contractor, City in connection with the preparation and updating of the Project Schedule, including phasing of construction, times of commencement and completion required of each Contractor, ordering and delivery of products requiring long lead time, and the occupancy requirements of City. Developer shall provide the current Project Schedule to the General Contractor for each set of bidding documents. Unless a specific software application is called for elsewhere in the Contract Documents, Developer will require General Contractor to use Microsoft - 19 -
Project, SureTrak Project Manager, Primavera Project Planner, or other scheduling software acceptable to City to configure all versions of its construction schedule.
Developer will require General Contractor to prepare the construction schedule using the critical path format. Schedule activities shall be of sufficient detail to assure that adequate planning has been done for proper execution of all of the construction work. Developer will provide City with electronic access to pdf versions of the submittals.
(g) Weekly Meetings and Look -Ahead Charts: Developer shall chair weekly meetings with City and the construction team during which the parties shall exchange information regarding the actual progress of construction. City, Developer, and General Contractor shall attempt to agree upon quantities and percentages of completion that reflect the actual progress of construction. At each meeting General Contractor shall submit 4 copies of a 2 -week look -ahead chart.
The 2 -week look -ahead chart shall include at a minimum those activities that will be started, in progress, or completed during the next 2 -week period. The format of the look -ahead chart shall be subject to City's approval, which will not be unreasonably withheld.
(h) Long Lead Time Items: Developer shall require the General Contractor to expedite and coordinate the ordering and delivery of materials requiring long lead times.
(i) Consultants: Developer shall select and coordinate the professional services of surveyors, special consultants and testing laboratories, deputy inspections and other, special inspections under contract with Developer as required for the Project and included in Developer's scope under the Contract Documents.
5.2 Bidding.
(a) Competitive Bidding: Developer will require its General Contractor to cause the various construction trade elements of the Project to be competitively and publicly bid in accordance with competitive bidding requirements pursuant to this Agreement under separate bid documents for each such construction trade or group of trades to multiple trade contractors, and in accordance with the optional pre -qualification procedure set forth in subsections (b) and (c), subject to subsections (1), (m), and (n). Developer and its General Contractor will administer the public competitive bidding and, to the extent allowed by law, negotiating procedures. Developer and its General Contractor may solicit bids for one or more portions of the Project, with additional bid solicitations to follow; provided, however, that Developer and its General Contractor will not cause the Project to be constructed through incrementally limited contracts with Trade Contractors so as to avoid the competitive bidding laws applicable to the Project, if any. Trade Contractors will enter into written contracts with Developer or its General Contractor for such work of improvement of the Project. Developer will ensure - 20 -
that the requirements of this Section 5.2 are incorporated into the GC Contract and make the GC Contract subject and subordinate to this Agreement. (b) Pre -Qualification: The City or City's Representative, General Contractor, and Developer may jointly determine to pre -qualify contractors to bid on portions of the Project. If City or City's Representative, General Contractor, and Developer agree to pre -qualify certain trades, then Developer and/or General Contractor will prepare Pre -Qualification Questionnaires for City's approval.
Subsequent to City's approval of the Pre -Qualification Questionnaires, and within the time period allowed for in the Project Schedule, Developer or its General Contractor will publish notices soliciting Trade Contractors to pre -qualify to bid on the portions of the Project that City or City's Representative, General Contractor, and Developer determined to pre -qualify, all in accordance with applicable Requirements of Law.
(c) Procurement Plan: Within the time period allowed for in the Project Schedule, Developer and General Contractor will cause bid documents to be prepared for each individual construction trade element of the Project that is to be separately bid ("Bid Documents") pursuant to the procurement plan attached as Exhibit P, which has been approved by City, subject to subsection (m). Developer will solicit lump sum or cost plus with a guaranteed maximum price bids for each individual construction trade element or package of the Project that is to be separately bid, pursuant to the approved Bid Documents, from the contractors in that construction trade.
(d) Bid Bonds: The Bid Documents will include a provision requiring that a bid bond accompanying a bid must include a rider naming Developer and General Contractor as dual obligees.
(e) Bid Process: Developer, General Contractor, or the Architect will answer questions of bidders and generate addenda to the Bid Documents, as necessary, during the bidding process for each individual construction trade element of the Project that is to be separately bid. Developer or its General Contractor will open and evaluate all complete bids received. City or City's Representative may, at its election, attend the opening of bids. (f) Analysis: Developer shall require the General Contractor to provide an analysis of the types and quantities of labor required for the Project and shall review with the General Contractor the availability of appropriate categories of labor required for critical phases. Developer shall make recommendations for actions designed to minimize adverse effects of labor shortages. (g) Bidders Interest: Developer shall require the General Contractor to develop bidders' interest in the Project, establish bidding procedures, issue bidding documents to bidders and conduct pre -bid conferences with prospective bidders.
Developer shall require the General Contractor to submit the list of prospective -21 -
bidders for City's review. Developer shall assist the General Contractor with respect to questions from bidders and the issuance of addenda. (h) Receiving Bids: Developer and the General Contractor shall receive bids, prepare bid analyses, and award contracts or reject bids. Developer and its General Contractor have the right to reject all bids for a portion of the work and re- bid the work.
(i) Awarding Contracts: If one or more complete bids for the individual construction trade element of the Project is/are received from a responsive and responsible bidder, as determined jointly by Developer and its General Contractor, then General Contractor may enter into a contract with each Trade Contractor for performance of each individual construction trade element of the Project for the fixed -price or cost plus with a guaranteed maximum price on the bid submitted by the Trade Contractor. To the extent consistent with applicable law, Developer and its General Contractor also have the right to have responsible, responsive bidders submit a best and final offer.
(j) Rejecting Bids: To the extent consistent with applicable law, if Developer and/or its General Contractor determine that a particular low bidder is non -responsive, is not responsible, or for any other reason should not be awarded the Construction Contract at issue, they will promptly reject the bid and may award the contract to the next lowest responsible, responsive bidder. (k) Bidder Default: To the extent consistent with applicable law, if Developer or its General Contractor awards a Construction Contract, but the successful bidder fails to execute the Construction Contract, then the following will apply:
(1) If Developer or its General Contractor awards the
Construction Contract to the second lowest bidder, then the amount of the lowest bidder's security will be applied by Developer or General Contractor to the difference between the low bid and second lowest bid, and the surplus, if any, will be returned to the lowest bidder if cash or a check is used, or to the surety on the bidder's bond if a bond is used.
(2) Developer or its General Contractor will be entitled to retain the amount of the lowest bidder's security.
(1) Best Value: In addition to the above procedures for bidding, Trade Contractors may also be selected based on qualifications or a combination of qualifications and price. The selection of Trade Contractors is the responsibility of the General Contractor. City must timely advise Developer, in accordance with the Project Schedule, if there are any Trade Contractors (including vendors or suppliers) that City specifies to be sole -sourced (including, but not limited to, BMS systems, technology infrastructure, elevators, etc.). Developer will procure the elevators on a best value basis.
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(m) Trade Contractor Procurement Plan: Developer and its General Contractor prepared a Trade Contractor procurement plan which has been approved by City. This Trade Contractor procurement plan identifies those Trade Contractors (including vendors and suppliers) anticipated to be selected by qualifications only per subsection (n) and those Trade Contractors anticipated to be selected by qualifications and competitive bid per subsection (1). However, notwithstanding the Trade Contractor procurement plan attached as Exhibit P, Developer may elect (with City's consent which will not be unreasonably withheld) on a trade -by -trade basis to select, or direct its General Contractor to select, Trade Contractor(s) on a negotiated, sole -source basis if Developer deems it is in the best interests of the Project.
(n) Negotiated Trade Contractors: Developer may select Trade Contractor(s) (including vendors or suppliers) based only on their qualifications when the Developer can demonstrate it is in the best interest of the Project. (1) Qualification based selection of a Trade Contractor should only occur during the design phase services under an approved guaranteed maximum price to achieve maximum benefit of the Trade Contractors' involvement.
(2) The Developer or its General Contractor shall apply the approved Trade Contractor procurement plan in the evaluation of the qualifications of a Trade Contractor, subject to subsection (m). (3) The General Contractor will negotiate costs for
services/supplies from each Trade Contractor selected under this method. (o) General Contractor Self -Performing: General Contractor will not be allowed to self -perform any work, including by force account, with the exception of daily safety, clean-up, demolition, and miscellaneous carpentry work, except that General Contractor (or its affiliates) may bid on specific trade scope(s) of work with the written consent of City provided that the following procedures are implemented for any trade that General Contractor (or its affiliate) bids:
(1) Developer will advertise and pre -qualify local trade contractors for the particular trade that General Contractor is bidding. (2) Developer will manage the trade contractor bidding process per the approved procurement process (Exhibit P). The bidding process for the particular scope will be explained in detail and will be part of the trade RFP.
(3) General Contractor may develop a bid per the same trade bid package as all of the trade contractors. All bids for the trade work shall be sealed bids and must be delivered directly to Developer. - 23 -
(4) Developer will deliver all bids, including General
Contractor's, to City's Representative for analysis per the approved procurement process.
(5) If General Contractor is awarded the particular trade work, General Contractor will be issued the same trade -contract agreement as all the other trade -contractors (except that change orders would be subject to Subsection (6), below).
(6) If General Contractor is awarded the trade work, there shall be no change orders for current scope of trade work. In case there is added scope, General Contractor shall follow required guidelines when submitting cost to Developer for review and shall follow the following protocol:
• Cost submitted by General Contractor
• Developer will review cost for added scope, quantities, labor, material selection and pricing.
• Developer will contact General Contractor with
questions/concerns in regards to the added cost.
• Developer will review this cost in person with General Contractor.
• Developer will send cost proposal to design team to review added scope.
• If deemed acceptable by design team, Developer will submit this cost proposal to City.
• Developer and General Contractor will meet with City and explain added scope, review quantities and potential Change Order details.
(p)
Compliance with Requirements of Law. In accordance with its standard of care, Developer shall be aware of and adhere to and obey all Requirements of Law applicable to the bidding of the Project.
5.3 Construction Phase. The Construction Phase is the time period from the Commencement of Construction until Final Acceptance. During the Construction Phase, Developer will have the following duties:
(a) Administer GC Contract: Developer shall administer the GC Contract for the Project in cooperation with the Architect. (b) Coordination: Developer shall provide administrative, management and related services to coordinate scheduled activities and responsibility of those under contract with Developer with each other and with those of the Developer, City and Architect to manage the Project substantially in accordance with the Project Schedule and Contract Documents.
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(c) Project Schedule: Developer shall require the General Contractor to update the construction schedule incorporating the activities of the Contractors on the Project, including activity sequences and duration, allocation of labor and materials, processing of shop drawings, product data and samples and delivery of products requiring long lead time and procurement. The Project Schedule shall include City's occupancy requirement showing portions of the Project having occupancy priority. Developer shall update and reissue the Project Schedule as required to show current conditions. If an update indicates that the previously approved Project Schedule may not be met, Developer shall require the General Contractor to take any necessary corrective action so as to cause the Project to be Substantially Completed on or before the Developer Obligation Date. Developer shall require the General Contractor to schedule and coordinate the sequence of construction so as to cause Substantial Completion of the Project on or before the Developer Obligation Date.
(d) Administration of Agreements: Developer shall administer the Architect's Agreement and Developer shall require the General Contractor to administer all Construction Contracts with Trade Contractors. Developer shall notify and consult with City and City's Representative regarding any material breaches or defaults by any party to a Construction Contract relating to the Project. (e) Cash Flow Reports: Developer shall develop, as and when necessary, cash flow reports and forecasts for the Project (including variances between actual and budgeted costs) and provide City with copies of same. (f) Inspections and Testing: In consultation with the Architect, Developer shall require the General Contractor to oversee the course of construction and Developer will engage third parties to conduct such inspections and testing of materials to ensure that the work is being performed in substantial accordance with the requirements of the Contract Documents in a good and workmanlike manner, free of defects and deficiencies in work. Developer shall reject Defective Work (as defined in Section 7.9) of which Developer has actual knowledge of the deficiency and cause corrective action to be taken. (g) RFIs: Developer shall transmit to Architect requests for information regarding the meaning and intent of Construction Drawings and Detailed Specifications and assist in the resolution of questions that arise. (h) Submittals: Developer shall expedite the processing and approval of shop drawings, product data samples and other submittals. (i) Changes: Section 8 of this Agreement shall control with regard to changes in the work.
(j) Progress Reports: Developer shall record the progress of the Project. Developer shall require the General Contractor to submit written monthly progress reports to City, showing percentages of completion. Developer shall - 25 -
require the General Contractor to maintain a daily log, containing a record of weather, each Trade Contractor's work on the site, number of workers, identification of equipment, work accomplished, problems encountered progress photos, and such other information as City may require. (k) Record Drawings: Developer shall require the General Contractor to maintain at the Project site or at Developer's offices in Irvine, California or at General Contractor's offices in Irvine, California, for City one record copy of all Construction Documents, addenda, change orders and other modifications, in good order and marked currently to record changes and selections made during construction together with approved shop drawings, product data samples and similar required submittals. Developer shall maintain records, in duplicate, of principal building layout lines, elevations of the bottom of the footings, floor levels and key site elevations certified by a qualified surveyor or professional engineer.
All such records shall be made available to Architect and City upon request and, upon completion of the Project, duplicate originals shall be delivered to City. (1) Contractor Pay Apps: Developer shall develop and implement procedures for the review and processing of applications by Contractors for progress and final payments.
(m) Project Pay Apps: Based on the Developer's observations and evaluations of each Contractor's Application for Payment, the Developer, Architect, or General Contractor shall review and certify the amounts due the respective Contractors. The Developer shall prepare Project Applications for Payment based, in part, on the Contractors' Applications for Payment. (n) Certifications: Each Project Application for Payment and certification of the Contractor(s)' certificates for payment shall constitute a representation to City that, to the best of Developer's knowledge, information and belief (which may be based on similar representations from the Architect and General Contractor), the work has progressed to the point indicated and the quality of the work is in substantial accordance with the Contract Documents (subject to minor deviations from the Contract Documents correctable prior to completion and to specific qualifications expressed by Developer in Developer's Project Application for Payment).
(o) Final Testing and Start -Up: Developer shall supervise the final testing and start-up of utilities, operational systems and equipment, in the presence of City's maintenance personnel if so requested by City. (p) Punch List: When Developer considers each Contractor's work or a designated portion thereof Substantially Complete, the Developer shall, jointly with the Architect, prepare for the Contractor a list of incomplete or unsatisfactory items ("Punch List") and a schedule for their completion. Developer shall assist Architect in conducting inspections to determine whether the work or designated portion thereof is Substantially Complete.
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(q) Final Completion: Developer shall require the General Contractor to coordinate the correction and completion of the work, including all Punch List items, and shall evaluate the completion of the work of the Contractors and make final recommendations to the Architect when the Project or any designated portion thereof has achieved Final Completion. Developer shall require the General Contractor to maintain a database of all Punch List items or otherwise unsatisfactory items observed and record the resolution of these items. Developer shall assist Architect in conducting final observations of the work. (r) Timely Completion: Developer shall take such other and further action as may be necessary or desirable to cause the Project to be Substantially Completed on or before the Developer Obligation Date.
5.4 Costs. Developer shall require the General Contractor to include in all Construction Contracts that all Trade Contractors shall comply with all applicable requirements of the Labor Code throughout the performance of this Agreement, including but not limited to the following:
(a) Wage Rates: Notice is hereby given that pursuant to Labor Code 1771, prevailing wages are required to be paid for any work that is a "public work" as defined in Labor Code Section 1720(a). Developer acknowledges that the Work of this Agreement is a public work. General Contractor and all Trade Contractors, as the case may be, shall comply with the provisions of California Labor Code Sections 1771 et seq., and shall pay workers employed for construction of the Project on this Agreement an amount equal to or more than the general prevailing rate of per diem wages for (1) work of a similar character in the locality in which Project work is performed and (2) legal holiday and overtime work in said locality.
The per diem wages shall be an amount equal to or more than the stipulated rates contained in a schedule that has been ascertained and determined by the Director of the State Department of Industrial Relations to be the general prevailing rate of per diem wages for each craft or type of workman or mechanic needed to perform the work of the Project. Developer shall require General Contractor to post all job site notices as required by Labor Code Section 1771.4(a), including a copy of these wage rates for each craft, classification, or type of worker needed in the performance of this Agreement. Copies of these rates are on file at the principal office of City's Representative, or may be obtained from the State Office, Department of Industrial Relations ("DIR") or from the DIR's website at www.dir.ca.gov . If this Agreement is federally funded, General Contractor and any Trade Contractors shall not pay less than the higher of these rates or the rates determined by the United States Department of Labor. For any contract that exceeds $2000 and is funded with federal funds, Developer will require General Contractor pay federal Davis Bacon wages and comply with applicable federal requirements. Developer shall require that its General Contractor insert in every subcontract or other arrangement which General Contractor may make for performance of Work or labor on Work provided for in this Agreement, provision that Trade Contractors shall pay persons performing labor or rendering service under subcontract or other arrangement not less than the general prevailing rate of - 27 -
per diem wages for work of a similar character in the locality in which the Work is performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work fixed in the California Labor Code. (b) Wage Rate Penalty: General Contractor and all Trade Contractors, as the case may be, shall comply with the provisions of Labor Code Section 1775.
Developer, General Contractor and all Trade Contractors shall be subject to a penalty in an amount up to $200, or a higher amount as provided by Section 1775, for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rates for any construction work done by the General Contractor or Trade Contractors under this Agreement. The sums and amounts which shall be forfeited pursuant to this Paragraph and the terms of the California Labor Code shall be withheld and retained from payments due to Developer's General Contractor under the Contract Documents, pursuant to this Section and the California Labor Code, but no sum shall be so withheld, retained or forfeited except from the final payment without a full investigation by either the State Department of Industrial Relations or by Owner. The Labor Commissioner pursuant to California Labor Code § 1775 shall determine the final amount of forfeiture. (c) Work Hour Penalty: As provided by Labor Code Section 1810, eight (8) hours of labor shall constitute a legal day's work, and 40 hours shall constitute a legal week's work. The time of service of any worker employed for construction work pursuant to this Agreement shall be restricted to eight (8) hours during any one calendar day, and 40 hours during any one calendar week, except as provided herein. Developer shall forfeit to City $25, or a higher amount as provided by Labor Code Section 1813, for each worker employed in the performance of construction of the Project under this Agreement by Developer or General Contractor or by any Trade Contractors for each calendar day during which such construction worker is required or permitted to work more than the legal day's or week's work, except as provided by Labor Code Section 1815. Developer shall obtain from its General Contractor a stipulation that it shall comply with all applicable wage and hour laws, including without limitation, California Labor Code §§ 1776 and 1810-1815 and that failure to so comply shall constitute a default under Developer's contract with General Contractor. Developer shall require that its General Contractor and its Trade Contractors be responsible for compliance with Labor Code §§ 1810-1815. Developer shall require that work performed on the Project by employees of Developer's General Contractor or its Trade Contractors in excess of 8 hours per day, and 40 hours during any one week, shall be permitted upon compensation for all hours worked in excess of 8 hours per day at not less than 1 1/2 times the basic rate of pay.
(d) Registration of Contractors: General Contractor and all Trade Contractors, as the case may be, must comply with the requirements of Labor Code Section 1771.1(a), pertaining to registration of contractors pursuant to Section 1725.5. Registration and all related requirements of those sections must be maintained throughout the performance of this Agreement. Developer shall require that any bids submitted without proof that General Contractor and any listed Trade - 28 -
Contractor(s) are currently registered and qualified to perform public work, pursuant to Labor Code Section 1725.5, not be accepted. (e) Payroll Records: General Contractor and all Trade Contractors, as the case may be, shall comply with the requirements of Labor Code Section 1776.
Such compliance includes the obligation to furnish the records specified in Section 1776 directly to the Labor Commissioner in an electronic format, or other format as specified by the Commissioner, in the manner provided by Labor Code Section 1771.4. The requirements of Labor Code Section 1776 provide in part:
(1) General Contractor and all Trade Contractors performing any portion of the construction work under this Agreement shall keep an accurate record, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by General Contractor or any Trade Contractors in connection with the work.
(2) Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(A) The information contained in the payroll record is
true and correct.
(B) The employer has complied with the requirements of
Labor Code Sections 1771, 1811, and 1815 for any work performed by his or her employees in connection with this Agreement. (3) The payroll records shall be certified and shall be available for inspection at the principal office of General Contractor on the basis set forth in Labor Code Section 1776.
(4) Developer shall inform City of the location of the payroll records, including the street address, city and county, and shall, within five working days, provide a notice of any change of location and address of the records.
(5) Pursuant to Labor Code Section 1776, Developer, General Contractor and all Trade Contractors, as the case may be, shall have 10 days in which to provide a certified copy of the payroll records subsequent to receipt of a written notice requesting the records described herein. In the event that Developer, General Contractor or any Trade Contractor fails to comply within the 10 -day period, he or she shall, as a penalty to City, forfeit $100, or a higher amount as provided by Section 1776, for each calendar day, or portion thereof, for each construction worker to whom the noncompliance pertains, until strict compliance is effectuated. Developer acknowledges that, without limitation as to other remedies of enforcement - 29 -
available to City, upon the request of the Division of Apprenticeship Standards or the Division of Labor Standards Enforcement of the California Department of Industrial Relations, such penalties shall be withheld from progress payments then due Developer. Developer's General Contractor shall not be subject to a penalty assessment pursuant to this Paragraph due to the failure of a Trade Contractor to comply with this Paragraph. (f) A-3prentices: Unless this Agreement involves a dollar amount less than that specified in Labor Code Section 1777.5, this Agreement is governed by the provisions of Section 1777.5. Developer shall require General Contractor to comply with Labor Code Section 1777.5 for all apprenticeable occupations.
General Contractor and all Trade Contractor(s), as the case may be, shall comply with Labor Code Section 1777.6, which forbids discriminatory practices in the employment of apprentices on any basis listed in Government Code Section 12940, except as provided in Labor Code Section 3077.
(g) Discrimination: In the performance of this Agreement, Developer agrees that it will comply with the requirements of the California Labor Code and not engage nor permit any subcontractors to engage in discrimination in employment of persons because of the race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, or sex of such persons. Developer acknowledges that a violation of this provision shall subject Developer to all the penalties imposed for a violation of the California Labor Code.
(h) Project Labor Agreement: In order to avoid any delay to the Project because of strikes, sympathy strikes, work stoppages, picketing, lockout, slowdowns, or other labor interferences that could disrupt and hinder the completion of the Project, the Developer shall cause its General Contractor to enter into a Project Labor Agreement (in form of Exhibit B) with the applicable trades union for any and all covered work for the Project. In addition, the Project Labor Agreement will create more local job opportunities for the Owner's residents.
6. Permits.
6.1 Permits. Developer shall obtain all Permits necessary to construct the Project pursuant to any and all Requirements of Law. For those Peiiiuts yet to be acquired as of the date of the execution of this Agreement, City shall have five (5) business days to review any Permit application Developer intends to submit. City's failure to object to terms or conditions of a Permit application, after being timely provided by Developer, shall constitute City's approval of the same and City's authorization for Developer to submit the Permit application. For those Permit applications already submitted by Developer prior to the execution of this Agreement, City shall receive a copy upon request. City shall join in any application for Permits as required, at the expense of Developer (but subject to Section
8.18 and if there are any additional fees required by an AHJ or any fees imposed by an AHJ exceeds the amount set forth in Exhibit D then the additional or excess fee will be an - 30 -
Other City Cost). Developer shall pursue issuance of such Permits with reasonable diligence to meet the Project Schedule.
6.2 Costs. All costs associated with issuance of the Permits, including the cost of any required off -site improvements, shall be Allowances unless otherwise indicated in Exhibit D or Exhibit I.
6.3 Schedule and Delays. City and Developer anticipate issuance of Permits by all AHJ and Commencement of Construction within the time allowance set forth in the Project Schedule set forth as Exhibit F hereto, and any delay in issuing the required permits by AHJ will be an Unavoidable Delay except to the extent that the delay is caused by the fault or neglect of Developer. The Project Schedule shall be updated by mutual agreement of Developer and City from time to time as reasonably required to reflect the status of the Project. Except as otherwise provided in this Agreement, there shall be no increase in the Project GMP as a result of any delay in issuance of the Permits or commencement or completion of construction of the Project unless due to Costs Resulting from City -Caused Delay, but the delay in issuing Permits by the AHJ at no fault of the Developer will be an Unavoidable Delay as set forth above.
7. Construction.
7.1 Commencement of Construction. As soon as reasonably practical following Bond Closing and issuance of Permits by all AHJ, City will issue to Developer a written Notice to Proceed (Construction). Within five (5) business days of City's issuance of the Notice to Proceed (Construction) (which date will be the commencement date for construction in the Project Schedule), Developer shall require Commencement of Construction to occur and such work is diligently and continuously prosecuted to Final Completion. Developer shall coordinate the sequencing of all construction and shall require all other Contractors to commence construction of that portion of the work covered under their respective Construction Contracts and diligently and continuously prosecute such work to Final Completion. Developer warrants to the City that materials and equipment incorporated into the Project shall be new unless otherwise specified.
7.2 Delays.
(a) Time Extensions. The Developer Obligation Date shall be extended to the extent of (1) Unavoidable Delays; and (2) City -Caused Delays. Extensions of time due to weather or force majeure, when granted, will be on a 1 to 1 day basis of calendar days credit for every Critical Path calendar day lost, with the credit for each separate extension rounded off to the nearest whole calendar day. (b) Liquidated Damages. The parties hereto agree that in the event that the Project is delayed that City's actual damages are difficult to estimate. As such, and as City's sole remedy for delay, Developer agrees to forfeit and pay to City the sum of $12,000.00 per day as liquidated damages, and not as a penalty ("Liquidated Damages") for each calendar day that Substantial Completion of the Project is delayed beyond the Developer Obligation Date, as that may be adjusted pursuant - 31 -
to the terms of this Agreement. City may deduct such sum from any payments due to or to become due to Developer. City shall pay over to Trustee any amount of Liquidated Damages as the Trustee specifies in writing is necessary for timely and full payment of City obligations under the Lease Agreement.
7.3 Guaranteed Maximum Construction Price Contract. As part of the Project GMP, the Project shall be constructed pursuant to one GC Contract for the entire Project which shall contain the Guaranteed Maximum Construction Price. Within ten (10) days after award of the GC Contract, Developer shall require General Contractor to furnish a payment bond for 100% of the amount of the construction portion of the Guaranteed Maximum Construction Price, in accordance with Civil Code Section 9554, and a performance bond for 100% of the amount of the construction portion of the Guaranteed Maximum Construction Price, guaranteeing the faithful performance of the GC Contract.
Developer shall require General Contractor to take steps to assure that the penal sum of the bonds shall be increased by the amount of any additive adjustments to the Guaranteed Maximum Construction Price as a result of City Contingency use, if necessary. Developer shall require General Contractor to have the payment and performance bonds each be issued by a surety that: (a) is authorized by the California Insurance Commissioner to transact surety insurance in the State of California; (b) has assets exceeding its liabilities in an amount equal to or in excess of the amount of the bonds; and (c) acts in compliance with Insurance Code Section 12090. The payment and performance bonds shall be in the form attached hereto as Exhibit M. Developer shall require General Contractor to have the Developer, City and Trustee be named as obligees under each payment and performance bond pursuant to a rider or riders as set forth in Exhibit M. If any surety upon any bond furnished in connection with this Agreement becomes objectionable to City and fails to submit to City the documents described in California Code of Civil Procedure Sections 995.660(a)(1) through (a)(4) within the time specified in those Sections, then Developer shall require General Contractor to promptly furnish such additional security as may be reasonably required by City to protect the interests of City and of persons entitled to make a claim against the payment bond as of that time. Failure to furnish such additional security shall constitute a material breach of the agreement. General Contractor may elect to deliver to City, in the amount of 10% of the construction costs for the Project, concurrent with the release of the Performance Bond, a warranty bond conditioned upon Developer or General Contractor correcting any defective work of improvement or materials incorporated into the Project that is discovered within the Warranty Period. In lieu of a warranty bond, General Contractor, at its election, may extend the Performance Bond for one year following Substantial Completion of the Project to cover defective materials and workmanship.
7.4 Construction Contracts. Developer shall require General Contractor to include in all Construction Contracts recitations or provisions requiring the following:
(a) Labor Code § 1700: Provisions requiring all Contractors employed on the Project to be responsible to pay the prevailing rate of wages as defined in California Labor Code Sections 1700 et seq. and available on the Department of Industrial Relations websites (but expressly excluding the Davis -Bacon Act and - 32 -
any rules and regulations promulgated thereunder), and to indemnify City, Tenant, Developer and Trustee for claims arising out of failure to pay proper wages; (b) Safety: Provisions for initiating, maintaining and providing supervision of safety precautions and programs in connection with the construction of the Project; and
(c) Indemnity: Provisions for indemnifying City, Tenant, Developer and Trustee for claims arising out of the negligence or willful misconduct of such Contractor and its employees and agents.
(d) Assignment: Provisions for assignment to the Trustee upon an Event of Default under the Indenture for which Developer has received written notice from the Trustee.
7.5 Protection of Persons and Property.
(a) Safety: Developer shall require the General Contractor to be responsible for initiating, maintaining and providing supervision of safety precautions and programs in connection with the construction of the Project. (b) Damage: Developer shall require the General Contractor to take reasonable precautions for safety of, and shall provide reasonable protection to prevent damage, injury or loss to: (1) all persons working on the Project construction site and all other persons who may be affected thereby; (2) the Project and materials and equipment to be incorporated therein; and (3) other property at or adjacent to the site.
(c) Notices: Developer shall require the General Contractor and all other Contractors to give notices and comply with all applicable Requirements of Law bearing on the safety of persons and property and their protection from damage, injury or loss.
7.6 Insurance During Construction. Insurance shall be provided by Developer, City, Architect and Contractors in accordance with the provisions of Section 16 of this Agreement.
7.7 Use of Developer Contingency. The amounts set forth in the various line items of Exhibit D are estimates only of Project Costs to be incurred. To the extent the actual Project Costs in any line item of Exhibit D exceed the amount shown for such line item, Developer shall first allocate amounts in other line items, in which the actual known Project Costs shall have been less than the amount in Exhibit D to the line item in which the excess Project Cost(s) has occurred. Following the allocation by Developer as set forth in the preceding sentence with respect to all line items, except Developer Contingency, Developer shall be fully entitled to draw upon the Developer Contingency line item of Exhibit D and use the Developer Contingency in its entirety, if necessary, to pay the Project Costs that fall within the categories of the Pre -Approved Developer Contingency Uses or, after obtaining consent of the City, which consent will not be unreasonably - 33 -
withheld, for Project Costs that do not fall within the categories of the Pre -Approved Developer Contingency Uses. The allocation of the Developer Contingency for costs within the categories of the Pre -Approved Developer Contingency Uses is at the reasonable discretion of Developer. For Project Costs that do not fall within the categories of the Pre - Approved Developer Contingency Uses, Developer may use the Developer Contingency for Project Costs as Developer reasonably deems necessary. After buy-out re -allocations, any net remaining money from line items will be moved to the Developer Contingency.
The Developer Contingency is also subject to the provisions of Section 12.7 if there is any unused Developer Contingency following Final Acceptance.
7.8 Completion of Construction. Developer shall achieve Substantial Completion of the Project on or before the Developer Obligation Date, provided the Project Costs, as and when due, and any other City costs are timely paid by City in accordance with Section 9 hereof. Following Substantial Completion, Developer shall require the General Contractor to diligently achieve Final Completion of the Project. Developer, Architect, and City will complete and execute the Final Completion form (Exhibit J) promptly upon Final Completion. City must provide written notice to Developer within ten (10) business days of receipt of the Final Completion form signed by Developer and Architect of all objections that City has to executing the Final Completion form. City's failure to timely provide written objections will be deemed to be City's waiver of any objections.
7.9 Warranties. Developer shall require the General Contractor to secure, for the benefit of City, all warranties and guarantees of the work by Contractors, suppliers and manufacturers of components of the Project. Upon Final Acceptance, Developer shall require the General Contractor to assign such warranties to City (provided that such warranties shall also be for the benefit of Developer). After Final Acceptance of the Project (including Developer's obligation under Section 14.3 to provide the written warranties to City) and during the Warranty Period, Developer shall assist City to enforce any warranties or guarantees with respect to the Project upon request. The GC Contract shall provide a minimum of a one (1) year warranty for workmanship with respect to the Building.
Without increasing the Project GMP, Developer and City have agreed that Developer shall require the General Contractor to obtain warranties of equal or longer periods from Trade Contractors and material suppliers for the fixtures, services, or subcontracts only as set forth in the Detailed Specifications that will be included in the Architect's Project Manual; provided, however, that the Developer shall not be required to assist City to enforce any warranties or guarantees that extend beyond the Warranty Period. Developer warrants that materials and equipment furnished under the Contract Documents will be new, of good quality, and carrying all available manufacturers' and installers' warranties; that construction will be of good and workmanlike quality; and that all of the work shall be performed in substantial conformance with the requirements of the Contract Documents, industry standards, and manufacturers' recommendations. Work not conforming to these requirements shall be considered defective ("Defective Work"). Defective Work does not include damage caused by modifications not executed by General Contractor or a Contractor, improper operation or maintenance, abuse, or normal wear and tear under normal usage. Unless otherwise provided in the Contract Documents, City's acceptance of Developer's work shall be accomplished by City recording a Notice of Completion as - 34 -
promptly as practicable after completion, inspection, and testing of all work required by the Contract Documents. The start date of Developer's warranty obligations, and of the manufacturers' and installers' warranties required by the Contract Documents, will be the issuance of the Certificate of Substantial Completion by the Architect. City's acceptance of the work shall not be construed to limit City's rights under the Contract Documents or release Developer from any responsibility for latent defects, for correcting Defective Work, or for honoring any warranty obligations of the Contract Documents.
7.10 Correction of Work. During the Warranty Period, Developer (or General Contractor or the applicable Trade Contractor, on behalf of Developer) shall take action to correct any Defective Work reported by City in writing. Developer shall initiate corrective action on Defective Work affecting use of a facility, safety, or preservation of property within forty-eight (48) hours after notification. Developer shall initiate corrective action on other Defective Work within ten (10) calendar days after notification. If Developer fails to initiate corrective action within the specified times or fails to complete the corrective work within a reasonable time, City may take whatever corrective action it deems reasonably necessary after giving written notice to Developer of the default. All reasonable costs incurred by City because of Developer's failure to correct Defective Work during the Warranty Period shall be due and payable immediately by Developer. The Warranty Period relates only to the specific obligation of Developer to return to the Project site and correct Defective Work. The Warranty Period does not establish a period of limitations with respect to any of Developer's other obligations under the Contract Documents, including but not limited to Developer's warranty, and it has no relationship to the time within which City may seek to enforce the Developer's obligation to comply with the Contract Documents or to the time within which proceedings may be commenced to establish the Developer's liability with respect to any of the Developer's obligations.
Warranty costs (to the extent not borne by insurance) shall be Project Costs. At Final Acceptance, there shall remain $50,000 in the Project Costs Account in the Project Fund to cover these items during the Warranty Period; said $50,000 shall be held by Trustee in trust upon Final Acceptance to be applied toward warranty work (including Developer's administration costs for the warranty work) in accordance with the GC Contract, with any amounts not so expended to be treated as Savings in accordance with, and subject to the limitations in, Section 12.7 below; however if there are no funds left in the Project Costs Account in the Project Fund (including the Developer Contingency) to pay for the corrective action, such costs shall be paid by Developer from its own funds.
Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Sections 7.8, 7.9 and 13), the warranties to be provided or obtained by Developer or Contractors shall not include and shall not be applicable with respect to any of the Financed FF&E except for those items that are expressly set forth in the Detailed Specifications. All manufacturers' and installers' warranties received by Developer or its General Contractor shall be assignable to City, and upon abandonment, termination, or completion of this Agreement shall be deemed, and hereby are, assigned to City.
Developer shall take actions within its direct control necessary to preserve the full scope of all manufacturers' and installers' warranties for the benefit of City and shall take no action that would impair City's rights under any such warranties. Before City's acceptance of the work, Developer shall deliver to City manufacturers' and installers' warranties, guarantees, instruction sheets, and parts lists, which are furnished with certain articles of - 35 -
materials incorporated in the work. Neither Final Payment nor any other provision in the Contract Documents shall constitute City's acceptance of work not performed in accordance with the Contract Documents nor relieve Developer of liability with respect to its warranty obligations or for Defective Work.
7.11 Stop Work by City. If Developer fails to correct Defective Work as required, or persistently fails to carry out work in accordance with the Construction Documents, then City, by written order, may order Developer and its General Contractor to stop the work, or any portion thereof, until the cause for such order has been eliminated.
7.12 Developer Default. If Developer defaults or neglects to carry out the work in accordance with the Contract Documents and fails within ten (10) calendar days after receipt of written notice from City to commence and continue correction of such default or neglect with diligence and promptness, then City may, without prejudice to other remedies City may have, act to correct such deficiencies. In such case an appropriate change order shall be issued deducting from the Project GMP the costs of correcting such deficiencies.
If the payments then or thereafter due Developer are not sufficient to cover the amount of the deduction, Developer shall pay the difference to City. Such action by City shall be without prejudice to any other rights or remedies to which City may be entitled under this Agreement or applicable law.
7.13 Work by Separate Contractors. If requested by City, Developer shall, as part of the Work, provide for the coordination of the Work to be performed by City's own forces or Separate Contractors, if any, with the Work to be performed by Developer.
Developer shall use reasonable efforts to cooperate with City and all Separate Contractors, and City shall use reasonable efforts to cooperate with Developer, General Contractor, and Contractors. In order to cause the Work and any work to be performed by Separate Contractors to be completed in an expeditious manner, Developer agrees that it will use reasonable efforts in order to ensure that City's own forces or Separate Contractors have a reasonable opportunity to complete their work as and when required. Developer has no responsibility to supervise or otherwise manage the work of City's own forces or Separate Contractors or to ensure its proper execution. City shall cause its own forces and each of its Separate Contractors, if any, to maintain commercial general liability insurance (naming Developer and General Contractor as additional insureds) in amounts reasonably approved by Developer and workmen's compensation insurance in not less than the minimum required statutory amount, and providing for a waiver of subrogation. Additionally, the City's own forces and Separate Contractors must comply with Developer's schedule, safety procedures, site rules, and other reasonable rules and regulations. If the Developer claims that delay or additional cost is involved because of such action by the City or its Separate Contractors, the Developer shall make such Claim as provided in Section 8. The Developer shall afford the City and Separate Contractors reasonable opportunity for introduction and storage of their materials and equipment and performance of their activities. The Developer shall reimburse the City for costs the City incurs that are payable to a Separate Contractor because of the Developer or the General Contractor's delays, improperly timed activities or defective construction that impact Separate Contractors. The City shall be responsible to Developer for costs (as an Other City Cost) and delays (as a City -Caused - 36 -
Delay) that Developer or Contractors incur because of delays, improperly timed activities, damage to the work or defective construction by City's own forces or Separate Contractors.
7.14 Compliance with Requirements of Law. In accordance with its standard of care, Developer shall be aware of and adhere to and obey all Requirements of Law applicable to the construction of the Project.
8. Changes to the Work.
8.1 No Changes Without City Approval. Following approval of the Construction Documents by City there shall be no changes in the work except in accordance with this Section 8.
8.2 Developer Approved Changes in the Work. It is anticipated that there will be field orders and change orders which shall result in minor changes or field adjustments to the scope of work. Developer shall use its reasonable efforts to apprise City of proposed changes in the work and its recommendations regarding them prior to any action being taken. It is anticipated that it may not always be possible to receive City's prior approval to these changes in a timely manner. Therefore, minor non -substantial field orders and change orders may be approved by the Developer, without prior City approval (but with notice to the City's Representative), but only if the changes authorized by these field orders and change orders shall not have the effect of extending the Developer Obligation Date or materially altering the work or increasing any Project Cost. As soon as practical, but no later than with the next Project Application for Payment, Developer shall provide City with all field orders and/or change orders approved by Developer. For the purposes of this Section an alteration shall be deemed to be "material" if it would reduce the intended quality of the Project, result in an increase of City's operational costs over time, result in a substitution of any of the systems in the Project (including but not limited to HVAC, plumbing, electrical, elevators, roofing, fire and life safely, security systems, and infrastructure components) or increasing any Project Cost. In the case of either a material alteration or a change that would result in failure to Substantially Complete the Project by the Developer Obligation Date, prior written approval by the City's Representative of the proposed change must be received.
8.3 Change in the Work Initiated by City. If City desires to initiate a change by using City Contingency, then City shall issue a written request ("Change Request") which shall set forth in reasonable detail the nature of the change and the type of quote requested (lump sum or time -and -materials with a not -to -exceed amount) and whether such change involves additions, deletions, or other revisions to the Contract Documents. Within seven (7) calendar days of receiving City's Change Request (or such longer time if approved by City because the scope of the requested change reasonably requires more time to analyze the cost and time impacts, such approval not to be unreasonably withheld), Developer shall present to City a detailed proposal for change in Project GMP and/or a change in the Developer Obligation Date, if any. If such change causes an increase or decrease in Developer's cost or the time required for performance of the work, an equitable adjustment shall be made and the Project GMP and/or Developer Obligation Date modified in writing accordingly by a writing signed by City and Developer. City may initiate a - 37 -
change only if the costs thereof are available in the City Contingency or if the parties identify and agree on a source of funds to pay for the change prior to execution of the change.
8.4 Claims by Developer. If Developer believes that it has a claim for a change in Project GMP or Developer Obligation Date, then Developer shall submit, within 14 business days of the event giving rise to the proposed change, a written request ("Request for Change") to City to issue a Change Order. Timely written notice to City (including meetings where City or City's Representative is present) is essential to City's identification, prioritization, and response to claimed changes, including any claimed delays. Developer's Request for Change shall include a description of the proposed change in the Contract Documents, the event or circumstance giving rise to the need for the change, and any proposed change in the Project GMP and/or Developer Obligation Date associated with the Request for Change, to the extent known at the time. If the Request for Change includes a proposal to extend the Developer Obligation Date, then Developer shall (to the extent known), provide to City a description of: (a) the cause(s) for the proposed extension of time; (b) the dates (or anticipated dates) of performance of the changed work; (c) activities on the Project Schedule affected by the change, any new activities created by the change, and their relationship with existing activities; (d) the anticipated extent of any claimed increase to the Developer Obligation Date; and (e) recommended action to avoid or minimize the increase. If Developer fails to take reasonable steps to mitigate a claim, then the claim will be limited or denied to the extent that such reasonable mitigation efforts would have limited or avoided the claim. If City agrees that a change in the Contract Documents is appropriate, then City may use the same options described in the "Lump Sum Change Orders" and "Time -and -Materials Change Orders" Sections below in response to Developer's Request for Change, to be paid for out of City Contingency funds.
In the event of a claim or litigation arising from any disagreement involving Developer's Request for Change, Developer's compensation (if any) shall be limited to an amount calculated in accordance with the "Time -and -Materials Change Orders" Section below. If City does not agree that a change in the Contract Documents is appropriate, City will direct Developer how to proceed by unilateral change order as discussed below.
8.5 Lump Sum Change Orders. For a lump sum change, Developer's proposal shall be itemized and supported with sufficient substantiating data (including but not limited to detailed Trade Contractor estimates, supplier quote sheets, prices, invoices, and rate sheets) to permit evaluation with respect to the following costs:
(a)
(b)
(c)
quantities);
(d)
durations);
Labor (showing hourly rate multiplied by estimated hours); Payroll taxes on labor;
Materials, supplies, and equipment (include unit costs and estimated Machinery and equipment rental (include rental rates and estimated - 38 -
(e) Sales, use, or similar taxes related to the work;
(f) Other Items: City may authorize other items that may be required for the changed work. Such items include labor, services, material, and equipment that are different in their nature from those required for the work and that are of a type not ordinarily available from Developer or any of its Contractors; (g) Reasonable overhead and profit associated with the change, calculated as follows:
(1) For changed work performed by General Contractor's own forces: 15% on the direct material and labor components for General Contractor, plus General Contractor's markup per contract on the total change order work, plus Developer's markup of 6% for overhead and profit on the foregoing; and/or
(2) For changed work performed by Trade Contractors: 15% for Trade Contractors, plus General Contractor's markup per contract on the Trade Contractors' change order, plus Developer's markup of 6% for overhead and profit on the foregoing; and
(3) For changed work performed by Consultants: 15% for
Consultants, plus Developer's markup of 6% for overhead and profit on the foregoing.
(h) Premiums for all bonds and insurance (bond to be billed at actual cost, insurance to be billed at the agreed Reimbursable Expenses insurance rate, and Developer shall provide documentation demonstrating it will actually incur an increase in bond costs directly attributable to the change).
City may reject Developer's lump sum proposal, may negotiate with Developer a revision of the requested change and associated lump sum proposal, or may approve the Developer's lump sum proposal and incorporate it into a Change Order.
8.6 Time and Materials Change Orders. For a time -and -materials change, City shall determine (if City and Developer cannot agree, in which case the City's determination is a Unilateral Change Order) the adjustment to the Project GMP on the basis of actual costs as follows:
(a) Cost of materials and supplies (show actual unit cost multiplied by actual quantity). The cost of materials shall be at invoice price, plus freight and delivery.
(b) Tool and equipment rental. Regardless of ownership, the equipment rental rates shall be based upon the edition of equipment rental rates published by the Caltrans Division of Construction, or locally available rate or other reference acceptable to City current as of the date the changed work is performed. The rental rates paid shall include the cost of fuel, oil lubrication, supplies, small tools, - 39 -
necessary attachments, repairs and maintenance of any kind, depreciation, storage, insurance, and all incidents. Necessary loading and transportation costs for equipment used on the changed work shall be included. If equipment is used intermittently and, when not in use, could be returned to its rental source at less expense to City than holding it at the work site, it shall be returned, unless Developer elects to keep it at the work site at no additional expense to City (i.e., City still responsible for cost that Developer would have incurred by returning the equipment and then bringing it back to the site). All equipment shall be acceptable to City, in good working condition, and suitable for the purpose for which it is to be used. Manufacturers' ratings and approved modifications shall be used to classify equipment and it shall be powered by a unit of at least the minimum rating recommended by the manufacturer. The reported rental time for equipment already at the work site shall be the duration of its use on the changed work, commencing at the time it is first put into actual operation on the changed work, plus the time required to move it from its previous site and back or to a closer site. Developer shall submit invoices for tool and equipment rental costs. (c) Cost of labor (show actual total hourly rate multiplied by actual hours spent on changed work). The costs of labor shall not exceed the wages prevailing for each craft or type of workers performing the changed work at the time the changed work is done. The costs of labor shall include the actual basic hourly rate, plus employer's actual regular payments for health and welfare, pension, vacation or holiday, training, and other direct costs resulting from federal, State or local laws, as well as assessments or benefits required by lawful collective bargaining agreements and shall be supported by payroll records. The costs of labor shall not include any amount for bonuses or extraordinary vacation or holidays.
The use of a labor classification that would increase the changed work cost will not be permitted unless Developer establishes the necessity for such additional costs.
Labor costs for equipment operators and helpers shall be reported only when such costs are not included in the invoice for equipment rental. The labor cost for foremen shall be proportional to all of their assigned work and only that applicable to changed work shall be paid. Non -direct labor costs including superintendence shall be considered part of the markup for overhead and profit below. (d) Sales taxes on materials (percentage of item (a), above). (e) Payroll tax on labor (percentage of item (c), above). (f) Insurance (workers' compensation and liability insurance). (g) Other Items. City may authorize other items that may be required for the changed work. Such items include labor, services, material, and equipment that are different in their nature from those required for the work and that are of a type not ordinarily available from Developer or any of its Contractors. Developer shall submit invoices covering all such items in detail. (h) Overhead and profit computed as set forth in 8.5(g). - 40 -
(i) Bond and insurance (bond to be billed at actual cost, insurance to be billed at the agreed Reimbursable Expenses insurance rate, and Developer shall provide documentation demonstrating it will actually incur an increase in bond costs directly attributable to the change).
Developer shall keep and present an itemized accounting of the costs or savings attributable to the changed work, together with appropriate supporting data. Upon request by City, Developer shall permit City to inspect Developer's original estimate for the Project, subcontract agreements, or purchase orders relating to the change. Upon completion of the changed work ordered to be performed on a time and materials basis, City will then issue a Unilateral Change Order adjusting the Project GMP according to the actual costs incurred and, if appropriate, adjusting the Developer Obligation Date.
8.7 Unilateral Change Orders. If City and Developer cannot reach an agreement on a proposed change, City may issue a Unilateral Change Order directing work on a time -and -materials basis as set forth above, and Developer reserves the right to dispute any determination made by City in accordance with the procedures set forth in Exhibit H.
8.8 No Extension of Time Without Impact to Critical Path. Developer shall not be entitled to an extension of the Developer Obligation Date unless Developer demonstrates a delay to the Critical Path shown on the most recent Project Schedule. If City and Developer do not agree on either entitlement to, or the amount of, the extension of the Developer Obligation Date, then the disagreement will be resolved by the dispute resolution procedures set forth in Section 24.
8.9 No Additional Compensation for Early Completion. Nothing contained in the Contract Documents creates any contractual right, express or implied, on the part of Developer to receive additional compensation for early completion of the Project.
8.10 No Changes After Substantial Completion. If City issues additive change orders after Substantial Completion for the Project, then such additive change orders will be considered Additional Services, and the work to be performed under those change orders will not delay the release of Retention to Developer for the Project (which will become due without regard to the status of the work that constitutes Additional Services), regardless of whether the applicable Notice of Completion has been recorded. City and Developer will enter into a new contract for the Additional Services, and the Developer (or its General Contractor) shall enter into new contracts with Contractors to perform such Additional Services or shall take other steps necessary to insure that the Additional Services do not extend the date by which Contractors for the original services can file mechanic's liens or stop payment notices. City will pay Developer compensation for Additional Services consisting of (a) the actual costs incurred by Developer for the Additional Services, (b) Developer's hourly rates then in effect for the time Developer's personnel spend on the Additional Services, and (c) Reimbursable Expenses at actual cost incurred by Developer in performing the Additional Services.
8.11 Credits. Regardless of whether the equitable adjustment associated with changed work is recorded through a lump sum or time -and -materials Change Order: (a) if -41 -
the net value of a change to the work results in a credit from Developer, then the credit given shall include costs as well as overhead and profit; or (b) if the net value of a change to the work results in additional costs, then overhead and profit will only be applied to the amount by which the added costs of the change exceed the credited amount. When a change proposed by City results in the deletion of work and the City and Developer are unable to agree upon the cost, overhead, and profit thereof, the City's estimate of the cost, overhead, and profit shall be deducted from the Project GMP by a Change Order unless within 15 days of receiving the City's estimate Developer presents proof that the City's estimate is in error.
8.12 Overhead and Profit. Overhead and profit on change orders shall be computed as set forth in Section 8.5(g). Regardless of whether the equitable adjustment associated with changed work is recorded through a lump sum or time -and -materials Change Order, the amount City pays for overhead and profit shall be Developer's only compensation for: all costs of supervision, superintendence, and scheduling; wages of timekeepers, watchmen, and clerks; incidentals; any and all field and home office expenses; costs of estimating and preparing change orders; all impact costs including but not limited to lost productivity associated with "learning curves," "productivity factors," and "ripple effects;" and all other expenses not included in itemized costs.
8.13 Compensation for Delay. Developer shall be compensated for its substantiated actual, direct expenses, together with the markup for overhead and profit described in "Overhead and Profit" above, resulting from City -Caused Delay. Under no circumstances shall City compensate Developer for extended home office overhead or profit based on an "Eichleay formula" or any other proportionate allocation of Developer's overhead expenses or profit, all of which shall be deemed to have already been included in the above -described markup. If City believes that it is entitled to delay damages, then City must submit, within 14 business days of the event giving rise to the claim, a written claim to Developer describing the delay and the amount of delay damages. City's written notice is a condition precedent to City's claim and to the commencement of delay damages.
8.14 Modifications. Upon execution of this Agreement, Developer will commence its services under this Agreement. It is understood and agreed that as work proceeds on the Project, certain clarifications and modifications may need to be made, including adjustments in floor plans, circulation, site work, and elevations, as well as detailing of materials, colors, and finishes. Modification of the scope of Work, and any interpretations of the Project documents having a substantial impact on the Project, may be approved by the City's Representative; provided, however, that except as authorized in writing by City, under no circumstances will the cost of the Project work exceed the Project GMP. Any approvals by the City's Representative required under this Section 8.14 must be made in a reasonably timely manner so as not to impact the Project work or Project Schedule; failure to respond in a reasonably timely manner will result in a City Caused Delay.
8.15 Minor Field Changes. Developer has the right during the course of construction of the Project to make "minor field changes," without seeking the approval of City, except to the extent that any such changes increase the cost of the Project GMP to - 42 -
City (or Other City Costs) or individually or cumulatively delay the completion of the Project beyond the Developer Obligation Date. "Minor field changes" are defined as those changes from the approved Construction Drawings and Detailed Specifications that have no material effect on the Project and are made in order to expedite the work of construction in response to field conditions. Nothing contained in this section will be deemed to constitute a waiver of or change in the applicable building code requirements governing any such "minor field changes" or in any approvals by City otherwise required for any such "minor field changes." "Minor field changes" will be documented, in writing, in daily field logs, record drawings, or equivalent, and will be made available for City inspection.
8.16 Conditions Affecting the Work.
(a) Existing Site Conditions: Information regarding the work site represented in the geotechnical reports (identified in Exhibit E) is believed to be correct; City does not warrant either the completeness or accuracy of such information, but Developer may rely on the completeness and accuracy of such geotechnical reports identified in Exhibit E.
(b) Site Investigation and Representation: Developer acknowledges satisfaction as to the nature and location of the work; the general and local conditions, particularly those bearing upon availability of transportation and access to the site; disposal, handling and storage of materials; availability of labor, water, electric power, telephone, and roads; uncertainties of weather or physical conditions at the site; the conditions of the ground; the character of equipment and facilities needed prior to and during the performance of the work; and all matters that can in any way affect the work or the cost thereof under this Agreement.
Developer and City have mutually agreed on the amount and types of on -site investigation to be done by Developer, and Developer has performed the mutually agreed on -site investigation. Therefore, if Differing Site Conditions (including, but not limited to, soil conditions, archeo-paleo artifacts, regulated items, environmental issues, etc.) are found either on -site or off -site, then Developer may make a claim for additional costs and/or schedule delay. (c) Topographic Maps: Topographic maps, if provided by City or Tenant (see Exhibit E), were used in the Project design, bidders may inspect such maps upon request to the Developer, or may obtain copies upon payment of the cost to reproduce the copies. Notwithstanding the foregoing, the Rialto Public Works Department, on behalf of City, may have provided or caused to be provided the topographic maps and other Project -related documents (see Exhibit E) for the Project site, and Developer, Architect, and General Contractor have reviewed same and are relying on their accuracy for the preparation, planning, and performance of their services and work.
(d) Differing Site Conditions: Developer shall promptly, but in no event more than seven (7) business days after the condition is first observed, notify City in writing of the following site conditions and shall leave such conditions undisturbed until otherwise directed by City:
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(1) Subsurface or latent physical conditions at the site differing materially from those represented in the Contract Documents listed in Exhibit E;
(2) Unknown physical conditions at the site differing materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract; and (3) Material differing from that represented in the Contract Documents which Developer believes may be hazardous waste pursuant to Health & Safety Code Section 25117.
(e) City Investigation: Upon written notice of Differing Site Conditions from Developer, City shall promptly investigate such conditions. If City finds that such conditions do materially differ and cause an increase or decrease in the cost of or the time for performance of the work, City may, at its discretion: (a) terminate all or part of this Agreement in accordance with Section 23.7; (b) issue a written change to this Agreement in accordance with Section 8; or (c) make any other appropriate arrangements to address the Differing Site Conditions. Any claim by Developer for adjustment hereunder shall not be allowed unless Developer has given proper notice.
(f) Disputes: If a dispute arises between the parties hereto as to whether the conditions constitute Differing Site Conditions or affect the price or time for performance of any part of the work: (a) Developer shall submit a written notice of potential claim to City including all information relating to the Differing Site Conditions that Developer has available to it at the time Developer delivers the notice of potential claim (and, if Developer decides to make a formal claim, then Developer will make a separate, formal claim pursuant to and in accordance with the requirements in Section 8.4); (b) Developer shall then proceed with all work to be performed under this Agreement; and (c) pending resolution of the claim, Developer shall not be excused from any scheduled completion date provided for by this Agreement. Developer shall retain any and all rights provided either by this Agreement or by law which pertain to the resolution of disputes between the parties hereto.
8.17 Changes in Requirements of Law. City and Developer shall negotiate a Change Order to equitably adjust the Project GMP and/or Project Schedule if: (a) the completion of the Project is adversely affected by the enactment, adoption, promulgation, modification or repeal of any Requirements of Law applicable to the design or construction of buildings or facilities leased by public agencies after the execution of this Agreement; or (b) there are any costs incurred resulting from (1) new or increased government fees or assessments (including fees not included in Exhibit D) or (2) from rulings on the part of state or local public officials beyond code and industry practice which are not known or anticipated at the date of execution of this Agreement and/or not included in the Contract Documents. Developer shall give notice to City of any such conditions in accordance with this Section 8.
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9. Payment of Project Costs. Trustee will act as disbursing agent and hold and disburse money on deposit in the Project Fund to pay Project Costs and other costs in accordance with the Indenture and this Agreement. City will direct the Trustee to make monthly disbursements from the Project Fund to Developer for Developer to then pay Project Costs. So long as there has not occurred an Event of Default by Developer under this Agreement, such disbursements from the Project Fund shall continue until the full Project GMP has been disbursed (except as provided in Sections 11 and 12 hereof) or the Project has been completed. Disbursements received by Developer from the Project Fund shall, except as otherwise expressly provided herein, be used solely to pay the Project Costs. Upon Developer's compliance with its obligations under this Agreement regarding Project Applications for Payment, City shall take all such action as is necessary and required to obtain such disbursements by the Trustee in accordance with the Indenture.
9.1 Applications for Payment. On or before the twenty-fifth (25th) day of the month immediately preceding a month in which Developer will submit a Project Application for Payment, the City, Developer, and General Contractor will meet to review a preliminary draft of such Project Application for Payment prepared by Developer (hereinafter referred to as a "Pencil Draw"). During the Pencil Draw meeting, the parties will agree on the percentage complete for each line item, which may be projected to the last day of the month. Developer will revise the Pencil Draw in accordance with any reasonable objection or recommendation of City that is consistent with the requirements of the Contract Documents. Such revised Pencil Draw will be resubmitted by Developer to City as the Project Application for Payment due on the tenth day of the month immediately following the month in which the Pencil Draw was first submitted. The Project Application for Payment will be in the form of Exhibit N. Developer will also submit with each Project Application for Payment a written narrative describing the basis for any item set forth in the Project Application for Payment that does not conform to instructions of City in connection with any applicable Pencil Draw. Developer shall submit to City on or before the tenth day of the following month for which it is seeking payment a Project Application for Payment signed by Developer, which shall also include a pay application submitted by the General Contractor consistent with the terms of the GC Contract. The Project Application for Payment shall request payment of a specified dollar amount, which shall constitute a portion of the Project GMP, reasonably detailed to reflect the amount of the Project Costs actually expended in each category of Exhibit D. Such Project Application for Payment shall request the appropriate amount of hard or soft costs based on a percentage of completion basis with respect to such work as of the date of such Project Application for Payment, less retainage being withheld by the General Contractor from any of the Contractors. When Retention that has been previously withheld from a pay application submitted by the General Contractor is to be paid by the General Contractor to a Contractor, it shall be added to the next pay application of the General Contractor submitted to Developer and included in the next Project Application for Payment.
Project Costs other than hard and soft construction costs that are incurred or paid on a schedule that is not related to percentage of completion (e.g., Developer Contingency paid only as allocated by Developer to specific costs incurred, Developer's Fixed Fee and Developer's Fixed Overhead paid as described in Section 11.3, Developer's Reimbursable Expenses paid as described in Section 11.2, reserves for warranty work paid only after - 45 -
Substantial Completion, the 150% holdback for uncompleted Punch List items, payment of unutilized contingency accounts or construction savings to City and/or Developer, etc.) shall be included in the Project Application for Payment only when such items are to be paid in accordance with other provisions of this Agreement, without regard to the percentage completion of the Project. Developer may also include in a Project Application for Payment the full amount (with no Retention withheld) for deposits for Commodities or for purchases of Commodities that require advance payment (e.g., the Financed FF&E) that will be paid by Developer within thirty (30) calendar days of Developer's receipt of the payment of the requested deposit or advance payment.
Developer shall also provide a reconciliation between the total of all draw amounts requested (including such draw request) under a Project Application for Payment and the then -current Exhibit D and include all the information and documentation required to be provided by the General Contractor to the City pursuant to the GC Contract, as well as a conditional partial lien release from the General Contractor and from such laborers, contractors and Trade Contractors performing work on site as City may require, to become effective upon payment to the General Contractor or such other payees of the amount of the payment specified in said Contractor's Application for Payment, and an endorsement to the Lender's Title Policy and a similar endorsement to the City's Title Policy showing no liens or claims of lien; provided, that if a lien has been filed, Developer and/or its General Contractor may resolve such lien in accordance with Section 19 below. Developer shall provide copies of all conditional partial lien releases to the title company issuing the Title Policies and shall execute an indemnity agreement with the title company in a form sufficient to enable the title company to issue the foregoing endorsements. Each Application for Payment must include:
(a) An accepted Schedule of Values and Schedule Update with a narrative report (if requested), all approved in writing by City and all developed in accordance with Section 5.1(f), to the extent that they are required. Developer's submissions of an accepted Project Schedule, Schedule Updates, and Schedule of Values are conditions precedent to City's processing of Applications for Payments that request payment of construction costs;
(b) Photographic documentation of completed work (as requested); (c) If requested, Developer shall within a reasonable time (estimated to be 60 days) provide three copies of certified payrolls from Developer and all Contractors for the period covered by the Application for Payment, with one copy having all pertinent information visible and two copies having the workers' names, addresses, and social security numbers blacked out or proof that the certified payrolls were electronically submitted to the DIR's eCPR system, if acceptable to City;
(d) Evidence satisfactory to City that Developer is fulfilling its obligations under the Contract Documents with respect to preparing daily reports and maintaining up-to-date As -Built Plans;
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(e) Conditional waivers and releases on progress payment or final payment (as applicable) from Developer, those Contractors of any tier, and those suppliers claiming funds covered by the Application for Payment, and unconditional waivers and releases on progress payment or final payment from Developer, General Contractor, those Contractors of any tier, and those suppliers who received funds through the preceding applications for payment, all in the form prescribed by Civil Code Sections 8120 through 8138 (provided, however, that with respect to Contractors and suppliers, unconditional waivers and releases will exclude the prior two months' payments); and
(f) Any other administrative documentation reasonably required by City or as agreed upon.
The Application for Payment shall show the total value of work completed or partially completed as of the date of submission of the Application for Payment, including 100% of the value of materials delivered to the Project site and not yet incorporated into the construction and long -lead time items, items specifically fabricated for the Project or specialized items (e.g., steel, curtain wall and glass, HVAC, generator, switch gear, light fixtures, etc.), and 100% of the value of materials delivered to Developer and stored at locations other than the Project site ("Stored Materials"), provided that Developer furnishes City satisfactory evidence that Developer has acquired title to the Stored Materials, the Stored Materials will be used on the Project, the Stored Materials are properly stored at a secure off -site location reasonably acceptable to City, the Stored Materials at each storage location are segregated from any other materials there that are not intended for use on the Project, and the Stored Materials are covered by insurance against loss, damage, theft or vandalism. City reserves the right to adjust an Application for Payment if a prior Application for Payment is determined to have been overstated or understated.
9.2 Payment Procedures. City shall have the opportunity to attend all meetings between Developer and Contractors at which applications for payments are to be discussed (e.g. Developer shall be available and shall require the General Contractor to be available for a monthly meeting for review of the current month's application for payment, if requested by City). City shall receive with the Project Application for Payment any documentation submitted to Developer supporting the General Contractor's application for payment. So long as City and Trustee shall have received the Project Application for Payment, including all required Developer certifications, lien releases, and other required supporting documentation, on or before the tenth day of a calendar month, City shall make any objections regarding such Project Application for Payment in writing as soon as practicable, but in any event no later than five (5) business days after receiving it or the City shall be deemed to have waived its right to object to such Project Application for Payment.
Within ten (10) business days of City receiving an undisputed, properly completed Application for Payment, City will submit a requisition (Exhibit B to the Indenture) to request that Trustee pay to Developer a sum equal to the value of the work completed since the commencement of the work, less all previous payments, plus a like percentage of the - 47 -
value of material delivered on the ground or stored subject to, or under the control of, City, and unused; provided, however, that Trustee shall hold 5% of the value of the construction work under the GC Contract (but will not withhold Retention on soft costs, General Contractor's fixed fee, Developer's Fixed Fee, Developer's Fixed Overhead, Commodities or deposits for Commodities (e.g., the Financed FF&E), or exceptions to Retention specifically set forth in the GC Contract) completed as Retention until the Retention Payment is made pursuant to Section 9.8. Upon request of Developer and at City's sole and absolute discretion, when the Work is 50% complete (by cost), as evidenced by City's approval of Project Applications for Payment showing the Work at least 50% completion, no further Retention may be withheld. If City fails to receive the Project Application for Payment on or before the tenth (10th) day of the month, City shall have a period of five (5) calendar days from its receipt of such Project Application for Payment to review and approve such application, and a period of ten (10) business days to pay amounts as to which there is no objection. If City objects to any portion of a Project Application for Payment, City shall provide detailed written comments explaining the nature of the disapproval as provided in the preceding paragraph, whereupon (i) for Project Costs which are approved by City, City shall request payment from the Trustee and (ii) Developer and City shall meet within two (2) business days to determine mutually acceptable revisions to the Project Application for Payment. If City delays timely progress payment from Trustee through City's breach, negligence or misconduct and not due to a deficient Application for Payment, and as a direct result of that failure Developer is required to pay to its General Contractor, Consultants, vendors, or Contractors additional amounts equivalent to statutory penalties or late charges (collectively, "late charges"), then City will pay to Developer those late charges in addition to the amount unpaid (and such late charges will result in an adjustment of the Project GMP in an amount equal to the amount of the late charges). Late charges will only be paid upon presentation to City of written evidence that the late charges were in fact owed and paid by Developer. No progress payment by City shall be considered to be City's acceptance of any part of the work.
Failure of Developer and City to determine mutually acceptable revisions to the Project Application for Payment within the two (2) business day period shall entitle either City or Developer to commence the dispute resolution process described in Section 24 hereof or, if necessary, litigation. Failure to reach agreement on an Application for Payment shall not relieve Developer from its duties and obligations under this Agreement or relieve City from its duties and obligations under this Agreement (including, but not limited to, paying undisputed amounts).
9.3 Requisition to the Trustee. City shall execute and deliver each requisition to the Trustee for the amount of the Project Application for Payment, or such undisputed portion thereof under Section 9.2. City shall undertake good faith efforts to cause Trustee to disburse the amount shown on such requisition to Developer for disbursement to applicable Contractors and others in accordance with the Indenture.
9.4 Initial Draw. The Initial Draw shall include a mutually agreed amount to reimburse Developer for Project Costs actually incurred or paid by those parties (including, without limitation, fees and costs incurred prior to this Agreement for the General Contractor, Architect and other design professionals) on and before the date of Bond - 48 -
Closing. City may include in the Initial Draw and/or subsequent draws amounts paid by Tenant for the PHASE 2 Services to reimburse Tenant for such costs, all or in part.
Developer and City shall agree on the maximum amount of the Initial Draw and shall notify Tenant of that agreed maximum amount by no later than three (3) business days prior to the Sale of the Bonds; in addition, Developer and City shall agree on the exact amount of the Initial Draw and shall notify Tenant of that agreed Initial Draw amount by no later than seven (7) business days prior to the Bond Closing.
9.5 Other City Costs. Notwithstanding anything to the contrary contained in this Agreement, all costs of every nature that constitute Other City Costs shall be the sole responsibility, cost and expense of City. City further agrees that Developer shall have no responsibility or liability for any of the Other City Costs and City shall timely fund all Other City Costs.
9.6 Lump Sum Work and Unit Prices. City shall pay for work shown on the schedule of values as "Lump Sum", "L.S.", or "Job" at the lump sum price shown. Any contract work for which a unit price has been agreed upon, will be paid for at the actual quantities constructed in accordance with the Contract Documents. Upon completion of the work, if the actual quantities show either an increase or decrease from the quantities stated in this Agreement, the unit price stated will apply unless a change to the unit price is warranted under the Section 8.
9..7 Allowances. Payment for any Allowance identified in the Schedule of Values shall be for direct cost reimbursement only, unless the Schedule of Values identifies it as a "Time and Materials" or "T&M" item. Reimbursable direct costs shall be verified by invoices and shall include any amounts paid to third parties, and do not include markups, including but not limited to supervision, labor, overhead, or profit related to the item.
Payment for Allowances based on T&M pricing shall be proposed by Developer subject to City's acceptance using the same criteria and proposal breakdown as that specified in the "Time -and -Materials Change Orders" subsection of Section 8. Any costs that exceed the maximum amount of any Allowance line item shall be addressed as a change to this Agreement consistent with Section 8, but in such event there shall be no markup for overhead and profit on the additional actual costs. Upon completion of the Project, each Allowance will be corrected for unused balances and a credit to the Project GMP will be issued by Change Order to reflect the actual sums authorized for work as Allowance items; provided, however, that if a particular Allowance is exceeded by a significant amount (as reasonably determined by Developer in its discretion), then the parties will issue a Change Order for that particular Allowance instead of netting all Allowances later so that Developer is not financing the excess cost. The following terms apply to Allowances:
(a) Include in the Project GMP all Allowances named in the Contract Documents. The amount of each Allowance includes:
(1) The cost of the product/material to Developer, less any applicable trade discounts.
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(2) Delivery to the site including handling, unloading, uncrating and storage.
(3)
(4)
(5)
(6)
(7)
Protection from the elements from damage.
Labor for installation and finishing.
Other expenses required to complete installation.
Applicable taxes.
Overhead and profit.
(b) Developer shall file a "No Collusion Affidavit" with City in regards to the actual cost price of Allowance items, and allow any requested examination of his accounts and those of his materials.
(c) Allowances are included in the scope of the Contract Documents. (d) Payment for Allowances shall be based on direct costs actually incurred by Developer for labor, materials, equipment, or other expenses required to accomplish the allowance. All payments shall be based on Developer's actual expense less any applicable trade discounts as verified by invoice(s), delivery to the site including handling, unloading, uncrating and storage, protection from the elements of damage, labor for installation and finishing, other expenses required to complete installation, applicable taxes, and charge for overhead and profit. (e) Except as set forth above with respect to Allowances that significantly exceed their value, upon completion of the Project, all of the Allowances will be corrected (netted out to an aggregate add or deduct) by a written change order signed by City and Developer to reflect the actual sums authorized for work as Allowance items.
(f) A list of Allowances is included in Exhibit D.
9.8 Retention Payment. To the extent allowed by applicable law, when the Work is 50% complete (by cost), as evidenced by City's approval of Project Applications for Payment showing the Work at least 50% completion, City will release a portion of the Retention to pay the Retention for the Trade Contractors who have completed their work.
In order for City to release Retention as set forth in the preceding sentence, the Work must be on schedule (as evidenced by the most recent approved Project Schedule) and on budget (as evidenced by the most recent Project Application for Payment). City will pay the remaining Retention (less 150% of the cost of outstanding Punch List work) within thirty (30) days of AHJ issuing a Temporary Certificate of Occupancy so that the General Contractor and Trade Contractors can be paid prior to the expiration of time to record mechanic's liens or stop payment notices. If the Retention Payment is made before Developer has complied with all of its obligations under this Agreement, then payment of - 50 -
Retention shall not be interpreted as Final Payment, and shall not relieve Developer of its obligations under the Final Payment provisions.
9.9 Final Payment. The Final Payment (which will include the remaining Retention, if any, less 150% of the cost of outstanding Punch List work) shall be made no later than 30 days after Developer Substantially Completes the work and submits an Application for Final Payment in proper form and suitable for payment. Developer's work will not be complete until Developer has delivered electronic versions of: (a) record drawings for the Project; (b) all operations and maintenance manuals; (c) manufacturers', suppliers', and installers' warranties, guarantees, instruction sheets, and parts lists; and (d) any other documents or information required by the Contract Documents as a condition to completion of the work. Developer's Application for Final Payment shall include:
(1) Developer's affidavit that payrolls, bills for materials and equipment, and other indebtedness connected with the Project have been paid or otherwise satisfied by Developer; and
(2) Conditional waivers and releases on Final Payment in the form prescribed by Civil Code Section 8136 from Developer, its Contractors of any tier, and its suppliers who will receive funds from the Final Payment, listing with specificity any and all claims under or arising out of this Agreement or the Project that remain unsettled.
9.10 Stop Payment Notices. If stop payment notices are filed against the Project or state, federal, or other governmental agency claims or liens are filed, then City may withhold the amount required by law from progress payments until such claims and liens have been resolved pursuant to applicable law. However, if the cause of the stop payment notice is due to City's unexcused failure to timely and fully pay Developer in accordance with the terms of this Agreement, then (a) City may not withhold and (b) Developer is entitled to make a claim for direct damages incurred as a result of or arising out of the withholding.
10. Other Services by Developer. Services may be performed by the Developer at the written request of City which are not included as part of the Project. Such services shall be performed pursuant to a separate written agreement between City and Developer.
11. Developer's Fixed Fee, Developer's Fixed Overhead, and Reimbursable Expenses.
11.1 Developer's Fixed Fee and Developer's Fixed Overhead. The Project GMP (Exhibit D) includes the Developer Fixed Fee and Developer Fixed Overhead payable to Developer in the amounts set forth in Exhibit D as the Developer's Fixed Fee and Developer's Fixed Overhead for Phase 2 Services under this Agreement, which is subject to adjustment as provided in this Agreement and is payable as set forth in Section
11.3. Any City -initiated change orders shall increase the Developer's Fixed Fee and Developer's Fixed Overhead in an amount calculated as set forth in Section 8.5 or 8.6, as applicable.
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11.2 Reimbursable Expenses. Developer's Reimbursable Expenses will be paid as incurred, without regard to the percentage complete of the Project. With respect to insurance, City shall reimburse Developer, as a Reimbursable Expense, Developer's expense (acknowledged and agreed to be $10.00 per $1,000 of contract value) for the Commercial General Liability, Employer's Liability, Auto Liability, and Professional Liability insurance required to be maintained by Developer under this Agreement. All other Reimbursable Expenses will be billed at cost without markup.
11.3 Payment of Developer's Fixed Fee and Developer's Fixed Overhead.
As part of the monthly Project Application for Payment, Developer shall be entitled to a ratable portion of the Developer's Fixed Fee and Developer's Fixed Overhead. The total amount of Developer's Fixed Fee and Developer's Fixed Overhead are set forth in Exhibit D. City will pay to Developer the Developer Fixed Fee and Developer Fixed Overhead compensation, in the amount identified in Exhibit D, as follows:
(a) Equal Monthly Installments: The Developer Fixed Fee and Developer Fixed Overhead for Developer's services under this Agreement will be deemed earned and paid in equal monthly installments (the number of installments equal to the number of months for the Project duration under the Project Schedule); provided, however, that if Developer completes the Project in less time, then the unpaid balance of the Developer Fixed Fee and Developer Fixed Overhead is due with the Final Payment to Developer under this Agreement (i.e., the equal monthly installments are for billing purposes, but the intent is that City will pay the full amount of Developer's Fixed Fee and Developer Fixed Overhead). If the Project takes more time, then Developer is not entitled to additional Developer Fixed Fee or Developer Fixed Overhead compensation (except as expressly provided in Section 8).
(b) Application: Developer will submit to City its request for payment of the Developer Fixed Fee and Developer Fixed Overhead as part of the Project Application for Payment under this Agreement.
12. Completion of the Project.
12.1 Substantial Completion of the Project. Developer shall achieve Substantial Completion of the Project by the Developer Obligation Date. Until Substantial Completion of the Project has occurred, City shall not occupy the Project and shall prohibit Tenant or any other party from occupying the Project; provided, however, that limited use of the Project for storage, move -in or installation of Tenant's Personal Property by City when such use is approved by Developer, such approval not to be unreasonably withheld, shall not be deemed to be occupancy. Notwithstanding that Substantial Completion of the Project shall have occurred, City shall be entitled to provide Developer with a Punch List, in accordance with the provisions of this Section 12.
12.2 Notice of Substantial Completion. When Architect considers that the Work is ready for its intended use, Developer shall require Architect to prepare and deliver to City a tentative certificate of Substantial Completion in the form of Exhibit L. The - 52 -
tentative Certificate of Substantial Completion will include by attachment a tentative list of items to be completed or corrected. Developer shall give notice in writing to City that the Project is Substantially Complete (except for Punch List items specifically listed as incomplete) in accordance with the Contract Documents ("Developer's Notice of Completion"). Promptly thereafter (but in no event exceeding three (3) business days), City, Developer, Architect, General Contractor and Tenant shall inspect the Project Work to determine the status of completion. If City does not consider the Work substantially complete or City objects to the Punch List, then City must notify Developer in writing within five (5) business days of the inspection giving all of City's specific reasons that the Project is not Substantially Complete or the Punch List is inaccurate; if City does not provide written notice within such time, then the City will be deemed to have no objection.
Once Developer addresses all of City's reasonable objections, Architect will then issue a definitive Certificate of Substantial Completion (with the potential of a revised Punch List) agreed to by the Architect, Developer, and City. The Certificate of Substantial Completion will include by attachment the (revised) Punch List. The completion of the Punch List, installation of City's IT, and completion of any other City work (e.g., City installation of Tenant's Personal Property) shall not be required in order for the Project to be Substantially Complete.
12,3 Completion of Punch List Items. Following Substantial Completion, Developer shall diligently cause all Punch List items to be completed promptly in accordance with the Contract Documents. Developer shall coordinate the performance of any such Punch List work to avoid any unreasonable hindrance to Tenant's installation of Tenant's Personal Property and its full occupancy of the Project.
12.4 Final Acceptance. Upon Final Acceptance, Developer shall be entitled to payment of the balance of Developer's Fixed Fee, Developer's Fixed Overhead, and all other Project Costs incurred in connection with the work, but not to exceed the Project GMP, which will be invoiced pursuant to Section 9, above. "Final Acceptance" means that each of the following items shall have occurred with respect to the Project:
(a) AHJ Approval: AHJ has issued a temporary or final certificate of occupancy or other approval (e.g., final building inspection by building officials) for the Project permitting Tenant to occupy and use the Project for its Permitted Use; provided, however, if the delay in the issuance of the certificate of occupancy or other approval is attributable solely to the City's or Tenant's work including, without limitation, Tenant's Personal Property, or an obligation of City or Tenant, then this condition shall be deemed satisfied;
(b) Conditional Waivers: Developer and each Contractor shall have provided its final conditional waivers and releases of lien in the statutory form. (c) Punch List Complete: All Punch List items shall have been completed, but if City consents to Final Acceptance without completion of all Punch Lists items, the parties shall have agreed upon the estimated costs of any Punch List items remaining to be completed and 150% of such estimated cost shall be withheld by the Trustee in the Project Costs Account until the Punch List items - 53 -
have been completed to the reasonable satisfaction of City. When the Punch List items have been completed, Developer shall notify City and, upon City's reasonable satisfaction that the Punch List items have been completed, City shall deliver its requisition to the Trustee for payment of the funds withheld by the Trustee under this Section 12.4(c);
(d) Final Pay App: Developer shall have submitted its final Project Application for Payment together with evidence reasonably satisfactory to City that all construction costs have been paid in full or will be paid in full with payment of the final Application for Payment;
(e) Project Costs Report: Developer shall have delivered to City a written report showing the allocation of Project Costs among the categories of Exhibit D and the remaining specified dollar amount of the Developer Contingency and the undisbursed portion of the Developer's Fixed Fee and Developer's Fixed Overhead;
(f) Title Policy Endorsement: City and Trustee shall each have received an endorsement to its respective Title Policy dated as of and issued on the date of Final Acceptance, which shall insure City and Trustee respectively (1) against any liens for labor or materials, whether or not of record, which may have arisen in connection with the construction of the Project, and (2) show no additional exceptions to the City's Title Policy other than those approved by or arising through City;
(g)
LEED Application: Not applicable; and
(h) Final Acceptance Obligations: Developer shall have completed and delivered the matters set forth in Section 14.
12,5 Approval of Final Project Application for Payment. Upon delivery of Developer's final Project Application for Payment and other materials set forth above, City shall, acting reasonably and in good faith, review and approve the final Project Application for Payment on or before that period expiring five (5) business days after receipt of the final Project Application for Payment, receipt of notice from Developer that the Punch List matters are complete (except those items permitted to remain outstanding pursuant to Section 12.4(c)), and City's receipt of the materials set forth in Section 14 of this Agreement. In the event no written comments from City are received by Developer within said five (5) business day period, City shall be deemed to have waived its right to comment on the Final Application for Payment or to disapprove the completion of the Punch List, except those items permitted to remain outstanding pursuant to Section 12.4(c). If City disapproves the final Project Application for Payment or completion of the Punch List, or any portion thereof, City shall provide detailed written comments explaining the nature and specific reason for each disapproval; whereupon, Developer and City shall meet within two (2) business days to determine mutually acceptable revisions to the final Project Application for Payment and the completion of the Punch List. Failure of Developer and City to determine mutually acceptable revisions to final Project Application for Payment - 54 -
and the completion of the Punch List within the two (2) business day period, shall entitle either City or Developer to commence the disputes resolution process described in Section
24. 12.6 Requisition of Final Payment. City shall execute and deliver the requisition for Final Payment to the Trustee within one (1) business day following expiration of said five (5) business day period, or if City disapproves of the final Project Application for Payment, then within one (1) business day after the date of approval of the mutually acceptable revisions to the final Project Application for Payment or the determination of the disputes resolution process, if applicable. Subject to the provisions for disbursement of unused contingency funds in Section 12.7 below, City shall take all steps to cause the Trustee to disburse the remaining money in the Project Costs Account, except for (1) any money withheld for completion of the Punch List items under Section
12.4(c), and (2) the $50,000 reserved for warranty work as provided for in Section 7.9, but in any event not more than the Project GMP, in the amount shown on such requisition. In addition, City shall in such requisition direct payment of the remaining Developer's Fixed Fee and Developer's Fixed Overhead in accordance with the provisions of Section 11.3.
12.7 Disbursement of Developer Contingency. Subject to allocation of the Developer Contingency by Developer to pay for Project Costs pursuant to Section 7.7, if all or some portion of the Developer Contingency is not used for Project Costs, then 50% of the unused Developer Contingency shall be paid to Developer.
12.8 Notice of Completion. Developer may record a Notice of Completion in accordance with Requirements of Law upon completion of the Project. If, after receipt of written notice that Developer intends to record or has recorded a Notice of Completion, City determines that the Project is not in compliance with this Agreement, then City must, within five (5) business days of Developer's written request, provide to Developer a written statement setting forth all of the reasons for City's determination that a Notice of Completion is premature. The statement must also specify the action(s) that City believes that Developer must take to properly record a Notice of Completion. After addressing the issues set forth in City's written notice, Developer will again notify City of Developer's intent to record a Notice of Completion and the parties hereto will continue to repeat the inspection and notice procedures until City agrees that the Notice of Completion may properly be recorded. Notwithstanding the foregoing, the parties agree that the Requirements of Law, and not City's or Developer's particular belief, will determine the validity of any recorded Notice of Completion.
12.9 Partial Occupancy. City reserves the right to enter and install equipment within each portion of the Project as it is ready to receive same, upon the condition that (a) Developer shall not be responsible for equipment so placed other than loss or damage caused by the acts or omissions of Developer or those in Developer's employ, and (b) City does not interfere with Developer's performance of work or damage any work in place.
City may, only with Developer's consent (which Developer may withhold in its sole and absolute discretion), take possession of or use all or part of any work prior to completion and final acceptance of all the work upon condition that (1) City's possession or use does not interfere with Developer's performance of work, and (2) such possession or use is - 55 -
allowed by the applicable insurance policy(ies). If Developer allows partial occupancy, then Developer shall be relieved of liability for loss or damage to completed portions of the work other than loss or damage caused by the acts, omissions, or breaches of warranty by Developer. Such taking of possession by City shall not relieve Developer from any other provisions of the Contract Documents, shall not constitute a final acceptance of any such work or of work not completed in accordance with the Contract Documents, and shall not relieve Developer from responsibility for correcting defective workmanship or materials in the area so occupied. City may, only with Developer's consent (which Developer may withhold in its sole and absolute discretion), during the performance of the work enter the work area for the purpose of performing any necessary work by City's labor or Separate Contractors, but only for the purpose of the installation of Tenant's Personal Property. In doing so, City shall not interfere with Developer, and Developer shall not interfere with other work being done by or on behalf of City. If City's acts or omissions cause damage or delay to Developer or the Project, then Developer shall be entitled to a claim for additional cost and/or time in accordance with Section 8.
13. Miscellaneous Developer Obligations. In addition to Developer's obligations listed elsewhere in this Agreement, Developer agrees to:
(a) Except as specifically noted, provide and pay for (as a Project Cost):
(1) Labor, materials, and equipment.
(2) Tools, construction equipment, and machinery.
(3) Water, heat, and utilities required for construction including any metering and connection fees or charges, except City will provide and pay for electric power and pay for water acreage assessment charges. If any utilities are in place and in use by the City at the site, Developer, to the extent available, at no cost may utilize such utilities (excluding telephone).
(4) Other facilities and services necessary for proper execution and completion of work to provide a facility capable of operation. (5) Legally required sales, consumer, and use taxes.
(b) Secure and pay (as Allowances) for: Permits, government fees, and licenses. Developer must pay the permit fees (as an Allowance) and fulfill the conditions of the permit from the San Bernardino County Planning & Development Services Department.
(c) Give required notices.
(d) Comply with the edition of California Building Code in effect at the time of issuance of the building permit (or as otherwise noted on the permitted set of Construction Drawings) and other codes, ordinances, rules, regulations, orders, and legal requirements of public authorities which bear on performance of work. - 56 -
(e) Enforce strict discipline and good order among employees. Do not employ on work:
(1) Unfit persons.
(2) Persons not skilled in assigned task.
14. Developer's Final Acceptance Obligations. On or before Final Acceptance of the Project, Developer shall obtain and electronically submit to City, the following:
14.1 As -Built Plans. A complete set of final as -built plans and specifications prepared by the General Contractor for the Project. Tenant Improvements will be provided in pdf and CAD.
14.2 Manuals. All technical and service, instruction and procedure manuals relating to the operation and maintenance of all HVAC systems and other mechanical devices and equipment installed in the Project, except insofar as relating to Tenant's Personal Property.
14.3 Warranties. An assignment (on a non-exclusive basis) and delivery of all warranties, guarantees, maintenance contracts, and machinery and equipment warranties received by Developer from the General Contractor or any Trade Contractor, or any supplier, materialmen or manufacturer relating to the Project; provided, however, that so long as Developer's warranty set forth in Section 7.9 herein remains in effect, Developer reserves the right, notwithstanding the assignment and delivery of such warranties hereunder to City, to fully enforce all such warranties in the place and stead of Authority.
14.4 Permits and Licenses. The originals (if not posted at the Project) of all Permits, licenses and other approvals necessary for the occupation, use and operation of the Project.
15. Indemnification.
15.1 Developer's Indemnification.
(a) To the maximum extent allowable by law, Developer shall indemnify and defend with counsel reasonably approved in writing by City and hold harmless Authority, City, Trustee and their respective elected and appointed officials, officers, contractors, and employees (collective, "City Indemnitees") from any claims, demands, or liabilities (hereinafter "Liabilities"), excluding professional negligence Liabilities, to the extent arising out of, pertaining to, or relating to (a) death or injury to people or damage or injury to property (excluding the Work itself) in connection with the performance of the Phase 2 Services; (b) the negligence, recklessness, or willful misconduct of Developer or anyone for whom Developer is liable; (c) any liability under workers' compensation acts, disability benefit acts, and other employee benefit acts (provided, however, the indemnify obligation hereunder shall not be limited by any limitation on the amount or type of damages, compensation or benefits payable under such acts); or (d) any liability - 57 -
stemming from the wrongful performance of Phase 2 Services. Notwithstanding the foregoing, Developer is not obligated under this AGREEMENT to indemnify any City Indemnitees from any liability to the extent such liability is ultimately determined to be due to the active negligence, sole negligence, or willful misconduct of City Indemnitees. If judgment is entered against Developer and City by a court of competent jurisdiction because of the concurrent active negligence of Developer and City or City Indemnitees, then Developer and City agree that liability will be apportioned as determined by the court. Neither Party shall request a jury apportionment. Notwithstanding anything stated above, nothing contained herein shall relieve Developer of any insurance requirements or obligations created elsewhere in this Agreement. Developer shall require indemnification of City in all of its contracts, including but limited to the Developer's General Contractor and Architect and their subcontractors and subconsultants. Furthermore, City and Developer hereby mutually release each other from liability and waive all rights of recovery against each other for any loss from perils insured against under the builders risk insurance policy to be carried by Developer or its General Contractor pursuant to Exhibit G.
(b) For professional negligence Liabilities, to the maximum extent allowable by law, Developer shall indemnify and hold harmless City Indemnitees from any Liabilities, to the extent that the Liabilities arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of such professional for the performance of professional services pertaining to the Project. Developer shall reimburse City Indemnitees for their reasonably incurred defense fees and costs to the extent Liabilities for professional negligence are determined to have been caused by the negligence of Developer. In no event shall the cost to defend charged to Developer exceed Developer's proportionate percentage of fault. However, notwithstanding the previous sentence, in the event one or more defendants is unable to pay its share of defense costs due to bankruptcy or dissolution of the business, Developer shall meet and confer with the other parties regarding unpaid defense cost. The parties intend for the provisions set forth in this Subsection (b) to be in compliance with Civil Code §2782.8, and this Subsection (b) will be interpreted in a manner that complies with Civil Code §2782.8
15.2 City's Indemnification. To the maximum extent allowable by law, City agrees to indemnify, defend with counsel reasonably approved in writing by Developer, and hold Developer, General Contractor, Contractors, Architect, consultants retained by Developer for the Project, and Trustee, and their respective officers, directors, employees, and agents ("Project Indemnitees") harmless from any Liabilities whether incurred by or made against Project Indemnitees of any kind or nature, including but not limited to personal injury or property damage, to the extent arising from or related to the negligent acts or omissions of City or any breach or default by City of its obligations under this Agreement. This indemnity applies even in the event of Project Indemnitees' concurrent fault, except that nothing in this indemnification provision shall be construed to require City to indemnify Project Indemnitees for Liabilities to the extent caused by Project Indemnitees' negligence, willful misconduct, or defects in design furnished by them. - 58 -
16. Insurance Requirements.
16.1 Developer's Insurance. Developer shall procure and maintain, at a minimum, for the duration of this Agreement the insurance as set forth in Exhibit G. The cost of such insurance shall be a Project Cost.
16.2 City's Insurance. City shall procure and maintain upon the delivery of the Certificate of Substantial Completion the property insurance as required in the Lease Agreement.
16.3 Verification of Coverage. Each party shall furnish the other with certificates of insurance and endorsements required by this Agreement. The certificates and endorsements for each policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on forms reasonably approved by the other party and are to be received and approved by such other party prior to the commencement of activities associated with this Agreement.
16.4 Builders Risk Insurance. If directed by City in writing, Developer shall procure and maintain, or will direct its General Contractor to procure and maintain, for the duration of this Agreement, the builder's risk insurance as set forth in Exhibit G. The cost of such builder's risk insurance shall be a Project Cost.
16.5 Notice of Cancellation. Developer and City, respectively, shall take steps to provide notification to Authority, City and Trustee in the event of insurance policy cancellation. Such notice shall be sent by Developer or City in writing at least 30 days in advance of such intended cancellation (10 days for cancellation due to non-payment of premium).
17. Representatives.
17.1 Developer Representatives. City agrees that the person with overall responsibility for the work for the Project for the Developer shall be Roger Torriero and Korin Crawford ("Developer's Representative"). The "Developer's Project Manager" shall be Deryl Robinson. Developer may also appoint an additional representative by giving written notice to City of the onsite representative. City shall have the right to approve any changes in the personnel named above, such approval not to be unreasonably withheld. City may rely on such representatives as having the authority to execute Change Orders in any amount unless Developer identifies to City in writing the officer(s) or employee(s) with such authority. Any written order or communication given to this representative shall be deemed delivered to Developer. In the absence of Developer's Representative in case of emergency, instructions or directions may be given by City to the General Contractor's project manager or superintendent. Such order shall be complied with promptly and referred to Developer or its representative. Developer's Representative must be able to read, write, and speak English fluently. Developer's Project Manager, if different than Developer's Representative, shall represent Developer in the absence of Developer's Representative, and all directions given to the Project Manager shall be binding as if given to Developer. Developer's onsite representative, if different than the - 59 -
Project Manager, shall represent Developer in the absence of Developer's Representative and Project Manager, and all directions given to the Developer's onsite representative shall be binding as if given to Developer. City may require Developer to replace the Project Manager or onsite representative whose conduct or performance is unsatisfactory.
Developer shall not change its Project Manager or onsite representative without City's consent unless the Project Manager or onsite representative is unsatisfactory to Developer or ceases to be in Developer's employ. If Developer's Project Manager or onsite representative leaves the Project, Developer shall replace him or her within two business days (unless additional time is agreed upon by City) with a new, qualified project manager or onsite representative.
17.2 City's Representative. City designates the Assistant to the City Manager (Tanya Williams or her successor) as "City's Representative," authorized to act on the City's behalf with respect to the Project, and the decisions of City's Representative will be binding on City. The "City's Project Manager" shall be Tanya Williams, who is authorized to act on the City's behalf with respect to the Project (including but not limited to approving Applications for Payment), and the decisions of City's Project Manager will be binding on City. City may also appoint an additional representative by giving written notice to Developer of the onsite representative. City's Representative and/or Project Manager shall promptly render decisions to avoid delay in the orderly process of design and construction of the Project. City may communicate with the Contractors and the Architect only through Developer's Representative or Project Manager. City's Representative and Project Manager may be changed by City from time to time by written notice to Developer. Unless otherwise expressly stated in the Contract Documents, City's Representative and/or Project Manager will issue and receive all written communications on behalf of City for the Project. Developer may rely on City's Representative and Project Manager as having the authority to execute Change Orders in any amount unless City identifies to Developer in writing the person(s) with such authority. Any written order or communication given to City's Representative or City's Project Manager shall be deemed delivered to City. Disbursement of bond proceeds for project payments require the additional approval of the City's Finance Director or the City Manager, acting on behalf of the City. Developer reserves the right to appeal any decisions rendered to the City Council for final determination.
17.3 General Contractor's Representative. Developer shall require its General Contractor to provide the services of the superintendent(s). A superintendent shall be present at the work site whenever work is in progress including whenever weather conditions necessitate its presence to take measures necessary to protect the work, persons, or property. In case of emergency, General Contractor's superintendent shall represent Developer in the absence of Developer's designated representative or Project Manager, and all written directions given to the superintendent(s) shall be binding as if given to Developer. The superintendent must read, write, and speak English fluently. City may require Developer to require its General Contractor to replace a superintendent whose conduct or performance is unsatisfactory. General Contractor shall not change its superintendent without City's consent unless the superintendent is unsatisfactory to General Contractor or ceases to be in General Contractor's employ. If General Contractor's superintendent leaves the Project, General Contractor shall replace him or her - 60 -
within two business days (unless additional time is agreed upon by City) with a new, well - qualified superintendent acceptable to City.
17.4 Emergency Contacts. Developer shall provide City with a list of names and telephone numbers at which Developer's representative, superintendent, and other key personnel can be reached during non -working hours in the case of an emergency.
17.5 Communications. All City communications to Developer, General Contractor, Architect, or any of the Contractors or their employees must be issued solely by the City's Representative or City's Project Manager and delivered exclusively to Developer. All communications from Developer, General Contractor, or any of Developer's consultants or their employees to City must be issued solely by Developer's Representative or Developer's Project Manager and delivered exclusively to the City's Representative or City's Project Manager.
17.6 Timely Decisions. City will, in a timely manner consistent with the Project Schedule, provide full information regarding its requirements for the Project. The City's Representative or Project Manager will render in a timely manner consistent with the Project Schedule all decisions requested by Developer's Representative or Project Manager which may be necessary to perform the Project in accordance with the Project Schedule.
City or City's Representative's or Project Manager's failure to timely provide required information will result in a City -Caused Delay.
18. Accounting, Inspection and Audit.
18.1 Accounts. Developer shall keep and will also require its General Contractor to keep such full and detailed accounts as may be necessary for proper financial management under this Agreement. Developer's accounting and control system shall be in accordance with standard accounting practices of the construction industry. Developer shall preserve all of its books and records relating to this Agreement, including but not limited to its job cost records, payables/receivables records, accounting books, bids, cancelled checks, receipts, subcontracts, purchase orders, journals, vouchers, payrolls, correspondence, drawings, daily logs, photographs, and memoranda, for a period of two (2) years after Final Payment. However, Developer is not required to keep or provide detailed records for amounts identified as fixed amounts or lump sums (including, without limitation, insurance, Developer Fixed Overhead, and Developer Fixed Fee) under this Agreement or the PDA, and such amounts will be deemed earned as billed and will not be subject to City's audit rights under this Agreement or the PDA (regarding the PDA, this provision is merely clarifying the original intent of the parties, not amending, when such amounts were earned or the records requirements and audit rights under the PDA relating to fixed amounts and lump sums, which the parties never intended to be subject to record keeping requirements or audits). Should Developer cease to exist as a legal entity, Developer shall forward its records pertaining to this Agreement to the surviving entity in a merger or acquisition, or, in the event of liquidation, to City upon City's timely written request.
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18.2 Inspection and Audit. City (including by request of Tenant), and their contracted representatives, shall have the right to examine and audit Developer's accounting procedures and internal controls of Developer's financial systems and to inspect and copy any books and records relating to this Agreement. Such an examination, audit, and/or inspection may be requested at any time during the Project, or two (2) years after Final Payment. If City so elects to conduct such an audit, it shall give notice to Developer, and such audit shall be conducted as soon as is reasonably feasible thereafter, but progress payments to Developer shall not be delayed pending the outcome of the audit. Such audit shall be conducted by an auditor selected by City, and City shall, except as hereinafter provided, pay the cost of such audit. Developer shall cooperate fully with City in the conduct of such examinations, audits, and inspections, shall grant full access at all reasonable times to its offices, the Project site, and its books and records relating to this Agreement, and shall allow City to interview Developer's employees who might reasonably have information related to Developer's books and records, provided that City has given Developer at least one working day's advance notice of City's intent to examine, audit, inspect, and interview employees. All examinations, audits, inspections, and interviews shall be conducted during normal business hours. If an audit discloses a material discrepancy (i.e., a discrepancy by more than five percent in the aggregate with respect to the expenses or fees billed by Developer), Developer shall reimburse City for the cost of the audit up to a cap of $50,000. Any adjustments in amounts due and owing by either party to the other party shall be promptly paid by the party owing the amounts due.
19. Construction Liens. Upon Final Acceptance of the Project and upon City's request during the progress of the Project, Developer shall submit evidence that all payrolls, material bills and other indebtedness relating to the work have been paid (subject to City's timely funding the Project Costs and all other costs that are the responsibility of City). If at any time there shall be appropriate evidence of any lien or claim (including stop payment notices) for which, if established, City shall be liable, or which would constitute a lien on the Project or Bond proceeds, and which is chargeable to and the responsibility of Developer, then provided that City has timely funded the Project Costs and all other costs that are the responsibility of City under this Agreement, upon written request by City, Developer or Contractor shall furnish a bond or other assurance in form and amount satisfactory to remove such lien or stop payment notice from the public records.
If any potential lien or stop payment notice claimant gives notice to Trustee in accordance with the provisions of applicable law that it has filed a mechanics' lien or stop payment notice against the Project and such lien or stop payment notice is the responsibility of Developer in accordance with the previous provisions of this Section 19, there shall be no further disbursement of Bond proceeds until Developer shall have provided Trustee and City with a bond or other security in accordance with applicable law to the amount claimed under the lien or notice until resolution of such dispute and payment of such lien or stop payment notice, agreement with such potential lien claimant that such notice is withdrawn, or a court declaration that such notice is void in accordance with the provisions of applicable law. Developer shall notify City and Trustee upon Developer's knowledge of the filing of any lien or the service of any stop payment notice in connection with the Project.
20. Priority Agreements. To the extent permissible under California law, Developer shall require its General Contractor to subordinate its lien rights, by agreement in form and substance satisfactory to City, to the Site and Facility Lease, Lease Agreement, and the Indenture - 62 -
securing the Bonds in favor of Trustee and its respective successors or assigns, and shall use its reasonable efforts to obtain a similar subordination from all Trade Contractors under this Agreement. Any Trade Contractor who refuses to so subordinate its lien rights must be specifically approved in writing by City.
21. Damage and Destruction; Condemnation.
21.1 Damage and Destruction. After the happening of any casualty to the Project, Developer shall give City and Trustee prompt written notice thereof generally describing the nature and cause of such casualty and the extent of the damage or destruction to the Project. Developer and City acknowledge, agree and assign all insurance proceeds which Developer or City may be entitled to receive prior to Final Acceptance of the Project with respect to damage or destruction to the Project to Trustee for deposit into the Insurance and Condemnation Proceeds Fund established under the Indenture, and each insurance carrier shall be and is hereby irrevocably instructed in accordance herewith. Such insurance proceeds shall be applied in accordance with the Lease Agreement which provides that Tenant and City will cause the net proceeds of any insurance claim to be applied to the prompt repair, restoration, modification, improvement or replacement of the damaged, destroyed, or defective portion of the Project or otherwise used to pay Project Costs, including increases in the Project Costs or, at their discretion solely in accordance with the Lease Agreement, Tenant and City may elect not to repair, reconstruct or replace the damaged, destroyed, or defective portion of the Project and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of the Indenture. If, prior to the Substantial Completion of the Project, Tenant and City direct that such proceeds be applied to the repair, restoration, modification, improvement or replacement of the damaged, destroyed, or defective portion of the Project, Developer shall proceed diligently to reconstruct and restore the Project in accordance with the Contract Documents and the provisions of this Agreement, and City shall direct that such proceeds deposited in the Insurance and Condemnation Proceeds Fund established under the Indenture, shall be disbursed to Developer in accordance with the provisions of Section 9 herein and the Indenture for payment of progress payments, for payment of the costs to repair and restore the Project in accordance with the Indenture. All costs of such repair or restoration of the Project exceeding the amount of the insurance proceeds shall be paid in accordance with the Lease Agreement, and Developer shall not be responsible for any such costs.
21.2 Condemnation. In the event of a partial condemnation of the Project to the extent that the Project may still be constructed in accordance with the Contract Documents, or may be constructed in accordance with the Contract Documents as modified by changes acceptable to City and Developer, Developer shall proceed diligently to construct the Project in accordance with the Contract Documents, as modified, if applicable. Any such partial condemnation proceeds shall be deposited in the Insurance and Condemnation Proceeds Fund established under the Indenture and applied in accordance with the Lease Agreement and, as applicable, disbursed in accordance with the provisions of Section 9 above. In the event of a condemnation of all of the Project or so much thereof that the Project may no longer be constructed in accordance with the Contract Documents, this Agreement shall terminate, Developer shall be paid for all costs incurred as of the date of - 63 -
such condemnation (including costs that Developer is obligated to pay third parties as of that date, together with a pro rata portion of the Developer's Fixed Overhead and the Developer's Fixed Fee), and the parties shall have no further obligations hereunder. In such event, after Developer has been paid in accordance with the foregoing sentence, all condemnation proceeds shall be applied by the Trustee pursuant to the Indenture.
22. Payment of Taxes/Assessments.
22.1 Real Property Taxes. Any and all real property taxes and assessments (including leasehold excise tax) levied against the Land and the Project or any portion thereof shall be paid by City. Notwithstanding anything to the contrary contained in this Agreement, Developer shall have no liability whatsoever for any real property taxes or assessments (including any leasehold excise tax).
22.2 Other State and Local Taxes. Except as otherwise provided in Section
22.1, Developer shall pay any and all state and local taxes assessed in connection with the Project, including, but not limited to, state and local retail sales taxes as part of the Project GMP. Developer shall complete all necessary tax returns relating to such taxes and file the same with the applicable state or local governmental agency and remit, on or before the date such tax payment is due, payment of such state and local taxes to the proper taxing authority.
23. Default and Termination.
23.1 Developer Default. The following events shall constitute an "Event of Default" by Developer if the same shall continue uncured after expiration of the applicable notice and cure periods set forth herein, if any:
(a) Material Default: If Developer shall fail to perform any material obligation under this Agreement;
(b) Persistent Failure: If Developer persistently or repeatedly refuses or fails to cause to be supplied to the Project enough properly skilled workers or proper materials to complete the Project, or if Developer ceases work on the Project for a period of fourteen (14) consecutive days (subject to Unavoidable Delays or City - Caused Delays);
(c) Misappropriation: If Developer misappropriates any funds received by Developer pursuant to the provisions of this Agreement; (d) Disregarding Laws: If Developer persistently disregards and fails to comply with laws, ordinances or rules, regulations or orders of a public authority having jurisdiction over the Project;
(e) Failure to Pay: If Developer fails to make any payments required for the Project to the General Contractor, Architect or otherwise and such failure is a breach of the GC Contract or Architect's Agreement or other applicable contract, and such failure to pay is not caused by City's unexcused failure to pay Developer; - 64 -
(f) Permit Revoked: If, due to the wrongful actions of Developer, any Permit required for construction of the Project shall be revoked or canceled; (g) Liens: If there shall occur any lien or other encumbrance on the Land or the Project caused by Developer which is not bonded and removed in accordance with Section 19 above; provided, however, that if the lien or other encumbrance results from City failing to pay the Project Costs or other costs that are the responsibility of City under this Agreement, as and when due, then Developer is not required to bond or remove such lien or encumbrance; (h) Defective Work: If there shall have occurred defective workmanship or materials within the Project which is not cured within the time period provided in Section 7.11 of this Agreement;
(i) Assignment: If Developer shall have assigned, pledged or encumbered its rights, duties or obligations under this Agreement in violation of Section 25.6 of this Agreement; or
(j) Bankruptcy: If Developer files a petition for bankruptcy or if it makes a general assignment for the benefit of Developer's creditors, or if a receiver is appointed on account of Developer's insolvency and any such petition or appointment is not dismissed within sixty (60) days.
23.2 City Remedies upon Developer Event of Default. Upon any Event of Default by Developer, City shall give Developer written notice of the same, whereupon following receipt of such written notice Developer shall have thirty (30) calendar days within which to commence all necessary action to cure any such Event of Default, (and if such cure is commenced, proceed to diligently complete such cure within a reasonable period of time), except with respect to Events of Default set forth in Section 23.1(c) and (h) for which the cure period shall be ten (10) business days, or Section 23.1(i) for which no cure period exists beyond the time period stated therein; provided however, that such cure period shall not apply to failure of Developer to achieve Substantial Completion of the Project on or before the Developer Obligation Date for the Project. If Developer fails to cure such Event of Default within the time period set forth above, City shall be entitled to the following remedies:
(a) Completion of the Project: To take over and complete the Project, City is hereby irrevocably appointed attorney -in -fact (the appointment being coupled with an interest) to enforce contracts or agreements theretofore made by Developer and to do any and all things that are necessary and proper to complete the Project and be entitled to use the undisbursed Project Fund proceeds to pay Project Costs;
(b) Specific Performance: In addition to a claim for damages for such breach or default, and in addition to and without prejudice to any other right or remedy available under this Agreement or at law or in equity, to commence an action for specific performance of this Agreement;
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(c) Withhold: To withhold approval of further disbursement of Bond proceeds;
(d) Damages: To bring an action for damages; or
(e) Termination: To terminate this Agreement without liability upon ten (10) days written notice. Upon receipt of written notice from City of a termination for cause, Developer shall cease operations as directed by City in the notice and take all actions necessary, or as City directs, for the protection and preservation of the work.
23.3 City Default. The following shall constitute an "Event of Default" by City if the same shall continue uncured after expiration of the applicable notice and cure periods set forth herein, if any:
(a) Failure to Pay: City fails to cause Trustee to make disbursements to Developer of any sum of money owed to Developer pursuant to this Agreement as and when due, including without limitation, all monies due and owing from the Project Costs Account unless Developer shall have committed an uncured Event of Default as set forth in Section 23.1 above.
(b) Assignment: City shall have assigned, pledged or encumbered its rights, duties or obligations under this Agreement in violation of Section 25.6; or (c) Material Default: City shall have failed to perform any other material obligation under this Agreement.
23.4 Developer Remedies Upon City Event of Default. Upon any Event of Default by City, Developer shall give City written notice of the same. Upon receipt of such written notice City shall have thirty (30) calendar days to cure any such Event of Default, except with respect to Events of Default set forth in Section 23.3(a) for which the cure period shall be five (5) business days. In the event City fails to cure such Event of Default within said period, Developer shall be entitled to stop all work relating to the Project (and any resulting delays will be an City -Caused Delay), if Developer so desires and shall further be entitled to pursue its rights and remedies at law and in equity under this Agreement, including without limitation, specific performance of City's obligations hereunder.
23.5 Remedies Not Exclusive. No remedy conferred upon either party in this Agreement is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. City and Developer waive claims against each other for consequential damages arising out of or relating to this Agreement. This mutual waiver includes, without limitation: (a) damages incurred by City for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and (b) damages incurred by Developer for principal office overhead and expenses including the compensation of personnel stationed there, for losses of financing, business - 66 -
and reputation, loss of bonding capacity, and for loss of profit, except anticipated profit arising directly from the Work. This mutual waiver is applicable, without limitation, to all consequential damages due to either party's termination of this Agreement, but this waiver of consequential damages will not be deemed to preclude (1) an award of liquidated damages or (2) damages covered by any applicable insurance covering City, Developer, General Contractor, the Contractors, the Work, or the Project (including any amounts not covered by such policies or any amounts subordinate to or included within such policy limits for which any insured is self -insured or has a deductible obligation under any applicable policy), it being the intent of the parties to not waive their right to recover insurance proceeds that they would otherwise be entitled to recover in the absence of the waiver of consequential damages.
23.6 Termination for Convenience of City. Notwithstanding any other provision of this Agreement, City may at any time and without cause terminate this Agreement, in whole or in part, upon not less than 90 days written notice to the Developer.
Such termination shall be effected by delivery of a Notice of Termination to Developer specifying the effective date of the termination, whether this Agreement shall be terminated in whole or in part, and, if applicable, the portion of work to be terminated. Developer shall immediately stop work in accordance with the Notice of Termination and comply with any other direction as may be specified in the Notice of Termination or as provided subsequently by City. City shall pay Developer for the work completed and accepted by City prior to the effective date of the termination, unpaid but earned portions of fees to Developer, General Contractor, Consultants, Architect, and Contractors, plus any actual termination costs incurred (such as demobilization costs, costs to protect the work in place, early termination fees for the trailer, equipment, etc.) and such payment shall be Developer's sole remedy. Under no circumstances will Developer be entitled to anticipatory or unearned profits, consequential damages, or other damages of any sort as a result of a termination in whole or in part under this provision. Developer shall require its General Contractor to insert in all Construction Contracts with Trade Contractors that (a) the Trade Contractors shall stop work on the date of, and, if applicable, the portion of work to be terminated in a Notice of Termination, (b) under no circumstances will Trade Contractors be entitled to anticipatory or unearned profits, consequential damages, or other damages of any sort as a result of a termination in whole or in part under this provision (but will be entitled to work performed through the date of termination and reasonable demobilization costs), and (c) shall require Trade Contractors to insert the same condition in any lower tier subcontracts.
23.7 Equitable Adjustment for Extended Delay. If, through no fault of Developer (e.g., Unavoidable Delays or City -Caused Delays), construction of the work is stopped for (a) ninety (90) or more consecutive calendar days or, (b) in the aggregate, one hundred twenty (120) or more calendar days, then Developer may request that this Agreement be terminated (which the City can approve in its sole discretion). If this Agreement is not terminated by mutual agreement, Developer will be entitled to an equitable adjustment to the Project GMP and/or Developer Obligation Date. The foregoing right to an equitable adjustment does not alter Developer's right to make a claim for increases to the Project GMP and/or extensions of the Developer Obligation Date under Section 8 for delays less than the foregoing time frames, but rather is intended to clarify - 67 -
that an extended delay as provided in the preceding sentence may have significant impacts on time and cost that require an equitable adjustment even if Developer was not otherwise entitled thereto (e.g., for Unavoidable Delays, where Developer typically only receives time but not money). If the City and Developer cannot agree on the equitable adjustment, then the dispute will be resolved pursuant to the dispute resolution procedures set forth in Section 24.
24. Disputes. City and Developer agree to follow the independent resolution process set forth in this Section 24 to resolve disputes regarding preparation of the Construction Drawings and Detailed Specifications and changes to Construction Documents in an economic and time efficient manner so that such documents conform to the requirements of this Agreement, the Project Schedule is not adversely impacted, and the Project as constructed will satisfy the Project Requirements. If a dispute arises between City and Developer during the design or construction of the Project regarding the adequacy of any Drawings or Specifications or the responsibility for any costs associated with any design development, addition or change (e.g., whether any design development is consistent with the Project Requirements), the parties shall attempt to resolve such dispute as expeditiously as possible and shall cooperate so that the progress of the design and construction of the Project is not delayed. If, however, the parties are unable to resolve the dispute within five (5) business days, either party may, by delivering written notice to the other and the Trustee, refer the matter to a dispute resolution mediator as set forth on the attached Exhibit H. If either party to this Agreement brings an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action or dispute shall be entitled to recover its reasonable attorneys' fees from the non -prevailing party. Pending resolution of the claim or dispute, Developer shall continue the work diligently to completion as directed by City. If the claim or dispute is not resolved, Developer agrees that it will neither rescind this Agreement nor stop the progress of the work provided that City continues to pay undisputed amounts.
25. Miscellaneous.
25.1 Waiver; Modification. No failure on the part of City or Developer to exercise any right or remedy under the Contract Documents shall operate as a waiver of any other right or remedy that City or Developer may have. A waiver by City or Developer of any breach or failure to perform under the Contract Documents shall not constitute a waiver of any subsequent breach or failure. The failure of City or Developer to enforce a requirement of the Contract Documents in one or more instances shall not preclude City or Developer from subsequently enforcing such requirement(s). No oral statement shall in any manner modify this Agreement. All changes to this Agreement must be in writing approved by both the City and Developer.
25.2 Neutral Authorship. In connection with the execution and delivery hereof, each party has been represented by counsel. Each of the provisions of this Agreement has been reviewed and negotiated, and represents the combined work product of both parties hereto. No presumption or other rules of construction which would interpret the provisions of this Agreement in favor of or against the party preparing the same shall be applicable in connection with the construction or interpretation of any of the provisions of this Agreement.
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25.3 Severability. The provisions of this Agreement are severable. If any portion or portions of this Agreement is declared void or unenforceable, it shall not affect the other provisions of this Agreement.
25.4 Relationship of Parties. Developer and City shall not be construed as joint venturers or general partners, and neither shall have the power to bind or obligate the other party except as set forth in this Agreement. Nothing herein shall be construed as reserving to City the right to control Developer's business.
25.5 Third Party Rights. The provisions of this Agreement are intended for the benefit of, and may only be enforced by the parties hereto and their respective successors and assigns, including, as to City, the Trustee. None of the rights or obligations of the parties herein set forth (or implied) is intended to confer any claim, cause of action, remedy, defense, legal justification, indemnity, contribution claim, set-off, or other right whatsoever upon or otherwise inure to the benefit of any Contractor, Architect, subcontractor, worker, supplier, mechanic, architect, insurer, surety, guest, member of the public, or other third parties having dealings with either of the parties hereto or involved, in any manner, in the Project. Notwithstanding the foregoing, if Developer fails to cause Substantial Completion of the Project to be achieved by the date set forth in the Project Schedule (subject to adjustment for Change Orders, Unavoidable Delays and City -Caused Delays as provided herein), Tenant shall be deemed a third party beneficiary of this Agreement and may enforce the performance by Developer of its obligations under this Agreement.
25.6 Assignment; Encumbrance or Pledge. Neither this Agreement nor any portion thereof may be assigned by Developer without express written consent of City, which consent may be withheld in the exercise of its absolute discretion. Any attempted assignment contrary to the provisions of this Section shall be void. Notwithstanding the foregoing, claims for monies due or to become due to Developer from City under this Agreement may be assigned without the written consent of the City to a surety, bank, trust company, or other financial institution and may thereafter be further assigned or reassigned to any such institution. Neither this Agreement nor any rights or duties hereunder nor any benefits derived herefrom may be assigned, delegated, pledged or encumbered to any other person or entity by City without the express written consent of Developer, which consent may be withheld in the exercise of its absolute discretion, except that City may assign its rights under this Agreement either to the Trustee pursuant to the Indenture as security in connection with the financing described in Section 3 above.
25.7 Notices. Any notices or other communications required or permitted by this Agreement or by law to be served on, given to, or delivered to either party hereto by the other party, shall be in writing and shall be deemed duly served, given, or delivered when personally delivered to the party to whom it is addressed or in lieu of such personal service, three (3) days after it is deposited in the United States mail, first-class postage prepaid, certified or registered, return receipt requested, addressed as follows, or sent via electronic mail or facsimile transmission with received invoice followed by a "hard copy" mailed, regular mail, within one (1) business day to the email address or fax number listed as follows:
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City: City of Rialto
Attention: Henry Garcia, Interim City Manager
City of Rialto
150 S. Palm Avenue
Rialto, CA 92376
Phone: 909-820-2528
Email: [email protected]
with copy to:
Eric S. Vail, City Attorney
Burke, Williams & Sorensen, LLP
1770 Iowa Avenue, Suite 240
Riverside, CA 92507-2479
Phone: (951) 788-0100
Email: [email protected]
Developer: Griffin / Swinerton, LLC
Attention: Roger Torriero
1 Technology Drive, Building I, Suite 829
Irvine, California 92618
Phone: (949) 497-9000 x210
Email: [email protected]
with copy to:
The Rodarti Group
Attn: Keith Davis, Esq.
20 Enterprise, Suite 375
Aliso Viejo, CA 92656
Phone: (949) 831-0303
Email: [email protected]
Either party may change its address for the purposes of this section by giving written notice of such change to the other party in the manner provided in this Section.
25.8 Entire Agreement. This Agreement (and the Exhibits referred to herein) constitute the entire agreement between the parties with respect to the subject matter hereof and may be amended only in writing signed by both parties.
25.9 Time Is of the Essence. Time is of the essence of this Agreement.
25.14 Employees of Developer. Developer is acting under this Agreement as an independent contractor and nothing herein contained, or any acts of Developer or City, nor any other circumstances, shall be construed to establish Developer as an agent of City.
Developer shall be responsible for each of Developer's employees or other persons performing services to be performed by Developer hereunder and for determining the - 70 -
manner and time of performance of all acts to be performed by Developer hereunder.
Developer shall maintain all required industrial and worker's compensation insurance for all employees of Developer and shall cause all Contractors, Architect and all design professionals and other persons, firms and corporations employed to perform services in connection with the Project to provide worker's compensation and similar insurance with respect to their respective employees.
25.11 Exhibits. The Exhibits to this Agreement, which are hereby incorporated by this reference, are:
Exhibit
Description
A Legal Description of Land
B Project Labor Agreement
C Intentionally omitted
D Breakdown of Project GMP
E Index of Approved Design Development
Documents
F Project Schedule
G Developer's Insurance Requirements
H Dispute Resolution Procedure
I Developer's Qualifications, Exclusions, and
Allowances
J Final Completion form
K Special Inspections and Testing
L Certificate of Substantial Completion
M Form of Performance and Payment Bonds; Dual
Obligee Rider
N Form of Project Application for Payment
O Intentionally omitted
P City -Approved Procurement Plan
Partial Section Reference
Recitals; Section 1
Section 5.4
Sections 1, 4.4, 4.7, 6.1, 7.7,
8.17, 9A, 9.7, 11.1, 11.3,
12.4 Sections 1, 8.16
Sections 1, 6.3
Sections 15.1, 16
Sections 8.7, 24, 25.16
Section 1
Sections 1, 7.8
Section 1
Sections 1, 12.2
Section 7.3
Sections 1, 9.1
Sections 2.7, 5.2
25.12 Compliance with Civil Rights Laws. During the performance of this Agreement, Developer shall comply with all federal and applicable state nondiscrimination laws, including but not limited to: Title VII of the Civil Rights Act, 42 U.S.C. § 12101 et seq.; and the ADA; and the provisions of the Lease Agreement that are applicable to Developer's performance of this Agreement. In the performance of this Agreement, Developer shall neither engage in nor permit its Contractors to engage in discrimination against any employee or applicant for employment on any basis listed in California Government Code Section 12940, including but not limited to race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, as those bases are currently defined in Government Code Sections 12926 and 12926.1, or as they may be modified. This prohibition shall pertain to employment, upgrading, demotion, or transfer; recruitment advertising; layoff or termination; rates of pay and other forms of compensation; selection -71 -
for training, including apprenticeship; and any other action or inaction pertaining to employment matters.
25.13 Public Records Act. Pursuant to the California Public Records Act ("CPRA"), Government Code Sections 6250 et seq., all records provided by Developer to City are subject to public disclosure upon request except as otherwise provided by law.
Prior to their submission to City, and within ten (10) days of receiving a Public Records Act Request, Developer shall identify any records it believes are exempt from disclosure, identify the applicable CPRA exemption, and mark or otherwise conspicuously identify those documents as CONFIDENTIAL. If the disclosure of such records is subsequently requested or determined by City to be required, City will notify Developer of such request or determination. Unless Developer obtains a protective order issued by a court restricting disclosure of the requested records, City may disclose the records if City determines that the Public Records Act requires disclosure. Developer shall indemnify and defend City in any action to compel disclosure of such records that Developer has identified as exempt from CPRA and requested City not to disclose.
25.14 Patent Infringement. Developer shall promptly report to City any notice or claim of patent infringement arising from the performance of this Agreement. Developer shall, upon City's request, furnish to City any and all information in Developer's possession relevant to such notice or claim. Developer shall indemnify City from any and all claims or lawsuits on account of any patent infringement arising out of Developer's performance of this Agreement, and shall pay any judgment rendered against City, its officers, or its employees resulting from such claim or lawsuit, except in cases where the patent infringement arises from an item specified by City. If City requires Developer to include a product in the Construction Documents, and the City -required product results in a patent infringement claim against Developer, then City shall indemnify Developer from any and all claims or lawsuits on account of any patent infringement arising out of the City - required product, and shall pay any judgment rendered against Developer, its officers, or its employees resulting from such claim or lawsuit.
25.15 Governing Law; Venue. This Agreement and all provisions hereof shall be interpreted in accordance with the laws of the State of California in effect on the date of execution of this Agreement. The Superior Court of San Bernardino County, State of California shall have exclusive jurisdiction and venue over any legal action arising under this Agreement, except only to the extent that Exhibit H provides otherwise.
25.16 Securing Worker's Compensation Insurance Certification. Developer, by executing this Agreement, hereby certifies: "I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract."
25.17 Employee Eligibility Verification. Developer hereby certifies that it complies with all applicable laws and regulations regarding the eligibility of its employees to work in the United States, and that all of its employees performing work under this - 72 -
Agreement meet all citizenship or immigration status requirements to do so. Developer shall obtain all documentation necessary to verify the employment eligibility status of covered employees as described by U.S. Citizenship and Immigration Services Form I-9.
Developer shall retain such documentation for the period prescribed by law. Developer shall indemnify, defend with counsel approved in writing by City, and hold harmless the City, its agents, officers, and employees from any sanctions or liability that may be assessed in connection with any violation of federal or State laws or regulations pertaining to the eligibility for employment of any of Developer's employees performing work under this Agreement.
25.18 Section 179D Allocation. Intentionally omitted.
[Remainder of page intentionally left blank.]
- 73 -
DATED the day and year first above written.
CITY: CITY OF RIALTO,
a California municipal corporation
By:
Name: Henry Garcia
Its: Interim City Manager
ATTEST:
By:
Barbara A. McGee, City Clerk
APPROVED AS TO FORM:
By:
Eric S. Vail, City Attorney
DEVELOPER:
GRIFFIN / SWINERTON, LLC,
a Delaware limited liability company
Contractor's License Number 1045588
By:
Name: Roger Torierro
Its: Principal
By:
Name: Korin Crawford
Its: Executive Vice President
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EXHIBIT A
LEGAL DESCRIPTION
The land referred to herein is situated in the State of California, County of San Bernardino and described as follows:
Property Address: 128 N Willow Avenue, Rialto, CA 92376 APN: 0130-191-11-0-000
Parcel 1 of Parcel Map No. 13781 in the City of Rialto, as shown by map on file in Book 167
of the minerals and mineral ores of every kind, including all petroleum, oil, natural gas and other hydrocarbon substances and products together with rights of ingress and egress beneath the surface of said land below the surface of 500 feet by Deed recorded August 5, 1966 in Book 6675Page 129 of Official Records.
APN: 0130-191-11-0-000
(End of Legal Description)
EXHIBIT B
Project Labor Agreement
Exhibit B
PROJECT LABOR AGREEMENT
FOR THE
RIALTO POLICE STATION PROJECT
BY AND BETWEEN
SWINERTON BUILDERS
AND
THE SAN BERNARDINO-RIVERSIDE BUILDING AND CONSTRUCTION TRADES
COUNCIL
AND THE
CRAFT UNIONS & DISTRICT COUNCILS
SIGNATORY TO THIS AGREEMENT
TABLE OF CONTENTS
PREAMBLE 1
ARTICLE 1 PURPOSE 1
ARTICLE 2 GENERAL PROVISIONS 2
ARTICLE 3 SCOPE OF AGREEMENT 3
ARTICLE 4 MANAGEMENT RIGHTS 6
ARTICLE 5 EFFECT OF OTHER AGREEMENTS 6
ARTICLE 6 UNION RECOGNITION, SECURITY, WAGES AND BENEFITS 7 ARTICLE 7 REFERRAL AND LOCAL HIRE 8
ARTICLE 8 HELMETS TO HARDHATS 8
ARTICLE 9 CONTINUITY OF THE WORK 9
ARTICLE 10 JURISDICTIONAL DISPUTES 11
ARTICLE 11 GRIEVANCE AND ARBITRATION PROCEDURE 12
ARTICLE 12 EXPEDITED ARBITRATION FOR S I`RIKES, LOCKOUTS AND JURISDICTIONAL DISPUTES 13
ARTICLE 13 SAFETY 14
ARTICLE 14 GENERAL SAVING CLAUSE 15
ARTICLE 15 NON-DISCRIMINATION 15
ARTICLE 16 PRE -JOB CONFERENCE 16
ARTICLE 17 ASSIGNMENT 16
ARTICLE 18 PROJECT SUPPORT 17
ARTICLE 19 ENTIRE UNDERSTANDING 17
ARTICLE 20 TERM OF AGREEMENT 17
ATTACHMENT A - LETTER OF ASSENT
SIDE LETTER 1 - REGARDING SUCCESSORSHIP
SIDE LETTER 1A - REGARDING SUCCESSORSHIP
ATTACHMENT B- ASSUMPTION AGREEMENT
EXHIBIT 1 TO ATTACHMENT B
Rialto Police Station2Project Labor Agreement
19 20
21 22
24
RIALTO POLICE STATION
PROJECT LABOR AGREEMENT
PREAMBLE
This Project Labor Agreement is entered into this 20th day of October, 2023, by and between Swinerton Builders, the general contractor (hereinafter, the "General Contractor") and the contractors and subcontractors that execute a Letter of Assent (as defined below) for the construction of the Rialto Police Station Project (hereinafter General Contractor, contractors and subcontractors that execute a Letter of Assent are collectively referred to as the "Employers") and the San Bernardino -Riverside Building and Construction Trades Council (hereinafter, the "Council") and the Local Unions and District Councils signatory to this Agreement and having members employed on the project (collectively, hereinafter the "Unions"). The General Contractor, Council, Unions, Employers and contractors and subcontractors that sign a Letter of Assent are referred to herein individually as a Party and collectively as the Parties.
ARTICLE 1
PURPOSE
L1, The purpose of this Agreement is to ensure that all work on this Project, as defined below, shall be performed efficiently, economically and without interruption by the skilled workforce supplied through and by the Unions.
1.2. The General Contractor intends to construct a new police station, along with associated infrastructure and related improvements ("Project") at 128 N. Willow in Rialto, California ("Project Site").
1.3. It is the objective of the Parties that the construction of this Project will benefit the Employers, the Unions, and the community, and it is recognized by all Parties that harmonious labor-management relations are the result of responsible conduct by the Unions and the Employers employing building trades people, and it is the Parties' mutual desire to promote these relationships on this Project.
1.4. The Parties hereby agree and do establish and put into practice effective and binding methods for the settlement of all misunderstandings, disputes, or grievances that may arise under this Agreement so that the Parties are assured of complete continuity of operation, without slowdown or interruption ption of any kind or for any reason, and that labor --management peace is maintained for the life of the Project.
1.5. In the interest of the future of the construction industry in the local area, of which the Unions are a vital part, and to maintain the most efficient and competitive posture possible, the Unions pledge to work and cooperate with the management of the Project to produce the most efficient utilization of labor and equipment in accordance with this Agreement.
ARTICLE 2
GENERAL PROVISIONS
Rialto Police Station3Project Labor Agreement
2,1, The General Contractor retains the right to control and coordinate all construction work on the Project by determining work scheduling, including start times and the necessity for and the times of shift work; directly enforcing any drug and alcohol abuse policy that is agreed to by any contractor or subcontractor and the Unions, and otherwise directly removing any employee, whether employed by any Employer, for breach of the rules promulgated by the General Contractor governing conduct on the job. The General Contractor shall have the right to order the corrective action necessary to maintain reasonable and lawful standards for work -place health and safety. The General Contractor, at its option, shall act as the coordinator, participate in pre - job conferences and mark-up meetings as provided in this Agreement, and participate in the resolution of any grievances.
2.2. The General Contractor possesses a valid California General Contractor's license and directly employs on -site personnel.
2.3. The Parties agree that this Agreement is a valid pre -hire agreement within the meaning of Section 8(f) of the National Labor Relations Act [29 U.S.C. § 158(t)].
2.4. The term "Employer" or "Employers" refers to the General Contractor, its contractors, and subcontractors at all tiers and any person or entity who assigns, awards or subcontracts Covered Work or authorizes another Party to assign, award or subcontract Covered Work, or performs Covered Work, but not including any governmental entity or any person or entity who performs, assigns, awards, subcontracts or authorizes Covered Work on behalf of a governmental entity.
2.5. It is understood that the General Contractor, at its sole option, may terrninate, delay and/or suspend any or all portions of the Project at any time.
2.6. It is understood that the final plans for the Project may be subject to design changes and modifications or may be revised as the result of the approval by those public agencies possessing lawful approval authority over the Project, and that this Agreement applies to the Project as it is finally approved by such agencies.
2.7. This Agreement shall be binding only on the signatory Parties hereto or Parties that have signed the Letter of Assent. This Agreement shall not apply to parents, affiliates, subsidiaries, divisions or other ventures of any signatory to this Agreement or the Letter of Assent, unless signed by such parent, affiliate, subsidiazy, division or venture. This Agreement shall be binding only with respect to the Project. It is understood that the liability of any Employer and the liability of the separate Unions under this Agreement shall be several and not joint. The Unions agree that this Agreement does not have the effect of creating any joint employer status between or among the Project Employers, and/or any other contractors.
2.8. As used in this Agreement, the terrn "Master Labor Agreement" or "MLA" refers to the local area collective bargaining agreements negotiated and executed from time to time by (i) Employers or applicable employer associations and (ii) Unions having jurisdiction over Covered Work. If there is a conflict between this Agreement and any Master Labor Agreement, then the provisions of this Agreement shall control.
Rialto Police Station4Project Labor Agreement
2,9. It is agreed that all Employers performing Covered Work on the Project shall become signatory to and be bound by the terrns and conditions of this Agreement by signing a Letter of Assent as provided in Attachment A of this Agreement.
2.10. Except as provided in this Agreement, there shall be no limitations whatsoever on an Employer's right to select the most qualified bidder for a construction contract, or material and/or equipment for purchase.
ARTICLE 3
SCOPE OF AGREEMENT
3, 1, Except as otherwise provided in this Agreement, all on -site preparation, demolition and abatement of existing structures on the Project Site and all refurbishing, renovation, rehabilitation, improvement and new construction work (under the recognized and accepted customary State of California definitions) performed by the Employers of whatever tier, required or permitted to be made to the Project Site that is within the craft jurisdiction of the Unions, shall be work covered by this Agreement ("Covered Work"). This Agreement applies only to the Project Site and shall have no force or effect on any other projects.
3.2. This Agreement shall not apply to the Employers' supervisors, technical executives, engineers, office and clerical employees, draftsmen, supervisors, timekeepers, messengers, guards, project management or any other employees above the classification of general foremen,
3.3. This Agreement shall include the classifications of Surveyor and Building/ Construction Inspector and Field Soils and Material Testers ("Inspectors") as covered crafts under this Agreement. This inclusion applies to the scope of work defined in the Master Labor Agreement for said crafts and shall also specifically include such work where it is referred to by utilization of such terms as "quality control" or "quality assurance". Every surveyor and Inspector performing work under these classifications pursuant to a professional service agreement or a construction contract shall be bound to all applicable requirements of this Agreement. Covered Work, as defined by this Agreement, shall be performed pursuant to the terms and conditions of this Agreement regardless of the mariner in which the work was awarded.
3.4. The following work is excluded from the definition of Covered Work under this Agreement:
3.4.1. All work of non -manual employees, including, but not limited to, superintendent, supervisors, staff engineers, designers, timekeepers, mail carriers, clerks, office workers, messengers, guards, safety personnel, emergency medical and first aid technicians, and other professional, engineering, administrative, supervisory, executive and management employees or to any other employees not covered by the local Master Labor Agreement of one of the Unions.
3.4.2. All engineering and planning work related to pre -demolition and pre -abatement.
3.4.3. It is recognized that certain specialty equipment and systems of a highly technical and specialized nature will have to be installed at the Project. The nature of the equipment and systems, together with requirements of manufacturer's warranty, may dictate that it be Rialto Police Station5Project Labor Agreement
prefabricated, pre -piped, and/or pre -wired and that it be installed under the supervision and direction of the manufacturer's personnel, The Unions agree to install such material, equipment and systems without incident, or allow such installation to be performed by the manufacturer's employees or a contractor certified by the manufacturer where the Unions are unable to perform such work or the warranty requires the work to be performed by the employees of the manufacturer or a contractor certified by the manufacturer. If a warranty on the manufacturer's specialty or technical equipment or systems purchased requires that the installation of such specialty or technical equipment or system be performed by the manufacturer's own personnel, then such installation may be performed by the manufacturer's own personnel. If a warranty on the manufacturer's specialty or technical equipment or systems purchased requires that the installation of such specialty or technical equipment or system be performed by a contractor certified by the manufacturer, and there are no Union signatory contractors certified by the manufacturer to install and/or perforin such work, then such installation may be performed by such certified contractor. The General Contractor shall notify the Unions at the pre job conference of the use of this provision and shall provide copies of the written warranty that require that the work be performed by the manufacturer's own personnel, or a contractor certified by the manufacturer, to the affected Union. When the warranty does not require installation by the manufacturer's own personnel or a contractor certified by the manufacturer, the Unions agree to perform and install such work under the supervision and direction of the manufacturer's representative. This does not apply to construction equipment. 3,4.4. All off -site manufacturing, fabrication and handling of materials, equipment or machinery except at dedicated staging, lay down or storage yards; however, the movement of materials or goods between Project work locations in the execution of a contract for Covered Work is within the scope of this Agreement. Off -site fabrication work for plumbing and IVAC systems, if set forth in a Union's MLA, shall be considered as Covered Work under this Agreement; provided however, prefabricated materials, such as manufactured bathroom units, kitchen units, countertops, cabinets, millwork panels, and similar pre -manufactured purchases which will arrive at the Project completely built out ready for hookup/installation, including the Project sales/leasing center, will be considered "off -the -shelf items," and will not be subject to the off -site fabrication provisions of the MLAs.
3.4.5. Any work performed on, near, or leading to the Project and undertaken by the state, county, city or other governmental bodies, or their contractors; or by utilities (including, without limitation, water, gas, electric, telecom, cellular, CATV, broadband and internet) or their contractors,
3.4.6. Any off -site work which is not part of the Project, or which is not required as a condition of approval for the Project.
3.4.7. All off -site maintenance of leased or owned equipment and on -site supervision of such work.
3.4.8. Work on the Project performed as a result of a threat to life, limb or property or other emergency or circumstances requiring immediate action.
Rialto Police Station6Project Labor Agreement
3.4.9. All non -construction support services contracted by an Employer in connection with this Project,
3.4.10. A11 hauling from and delivery to the Project Site and deliveries of all materials required to complete the Project, except that companies delivering asphalt, aggregates and concrete which pay their employees not less than the wage rates and employee benefit costs set forth in the collective bargaining agreement between Teamsters and National Ready Mix Concrete Co. for all of their deliveries throughout San Bernardino County shall be used on the project. 3,4.11, All cleaning of temporary toilets and servicing of the same; dumpstcr delivery and servicing of the same.
3.4.12. Any warranty repair or maintenance work required by warranty and performed by employees of an Original Equipment Manufacturer (`°OEM") or other vendor, after the initial installation by the Unions on the OEM's or vendor's equipment, This exclusion shall only apply to routine maintenance and repair work performed by employees of the OEM or its vendor.
3.4.13. All maintenance of non -construction equipment, janitorial, and security services.
3.4.14. All work after a Temporary Certificate of Occupancy or beneficial occupancy, as described in Article 10, is taken, including customer service activity that is not customarily contracted out to a contractor in the construction industry.
3.4J5. All work for the delivery, unloading, moving and installation of unattached pieces of furniture, fixtures, equipment and owner supplies & equipment for non -construction materials, that is not covered by an applicable Master Agreement.
3.4.16 All work for the installation of security andlor surveillance systems except for the installation of any conduit and wiring which is considered Covered Work.
3.4.17 All work for the installation of the shooting range equipment.
3.4.18 All Information Technology systems and networking, except for the installation of any conduit and wiring which is considered Covered Work.
3.4.19 All city hired Contractors/Vendors, however, the Contractor will notify the Council in advance of such city hired Contractors/Vendors.
3.5. When work listed in Section 3.4 above is performed, the Unions shall continue to be bound by all the provisions of this Agreement.
ARTICLE 4
MANAGEMENT RIGHTS
4J. The Employers retain full and exclusive authority for the management of the Project and their operations, as set forth in this Article, and shall retain all existing rights of management and Rialto Police Station7Project Labor Agreement
all rights conferred by law unless expressly limited or required by a specific provision of this Agreement or an MLA. The management of the Project, including, but not limited to, the hiring, promoting, laying off, suspending, disciplining, or discharging for cause, direction of work force, work schedules (including establishing coordinated working hours and starting times) and work practices for the Project shall be vested solely in the Employers except as specifically and expressly limited by this Agreement. The General Contractor has the right to establish common rules (including drug/alcohol and safety) for the Project and distribute such Project rules to each employee.
4.2. There shall be no limit on production by workmen or restrictions on the full use of tools or equipment. Craftsmen using tools shall perform any of the work of the trades and shall work under the direction of the craft foremen. There shall be no restrictions on efficient use of manpower other than as may be required by safety regulations. The Employers may utilize the most efficient methods or techniques of construction, tools or other labor-saving devices to accomplish the Covered Work. Practices not a part of the terms and conditions of this Agreement will not be recognized.
4.3. The Employers shall be the sole judge of the number and classifications of employees required to perforrn work subject to this Agreement and shall have the right to deterrnine the competency of all employees and the duties of such employees within their craft jurisdiction.
The Employers shall have the absolute right to hire, promote, suspend, discharge or lay-off employees at their discretion and to reject any applicant for employment; provided, however, that such right is exercised in good faith and not for the purpose of avoiding the Employers' commitment to employ qualified workers through the procedures established in this Agreement.
ARTICLE 5
EFFECT OF OTHER AGREEMENTS
5.1. The provisions of this Agreement, including the Master Labor Agreements, as such may be changed from time -to -time and which are incorporated herein by reference, shall apply to Covered Work under this Agreement. This Agreement is not intended to supersede the MLAs between any of the Employers performing construction work on the Project and a Union signatory thereto except to the extent the provisions of this Agreement are inconsistent with such MLAs, in which event the provisions of this Agreement shall apply. However, such does not apply to work performed under the National Cooling Tower Agreement, the National Stack Agreement, the National Transit Division Agreement ("NTD"), work within the jurisdiction of the International Union of Elevator Constructors, and all instrument calibration and loop checking work performed under the terms of the UA/IBEW Joint National Agreement for Instrument and Control Systems Technicians, except that Articles dealing with Work Stoppages and Lock -Outs, Work Assignments and Jurisdictional Disputes, and Settlement of Grievances and Disputes shall apply to such work. Where a subject is covered by the provisions of a Master Labor Agreement and not covered by this Agreement, the provisions of the Master Labor Agreement shall apply. It is specifically agreed that no later agreement shall be deemed to have precedence over this Agreement unless signed by all Parties signatory hereto who are then currently employed or represented at the Project.
Rialto Police Station8Project Labor Agreement
5.2. Employers will require all contractors and subcontractors who are awarded or arc performing Covered Work on the Project to become signatory to this Agreement. By accepting the award of a construction contract or entering into a contract to perform any Covered Work pursuant to a construction contract whether as a contractor or subcontractor, each contractor and subcontractor, of whatever tier, agrees to sign the Letter of Assent as shown in Attachment A and be bound by each and every provision of this Agreement. No contractor or subcontractor shall commence Covered Work without having first provided a copy of the Letter of Assent as executed by it to the Council, forty-eight (48) hours before the commencement of Covered Work, or within forty-eight (48) hours after the award of Covered Work to that contractor or subcontractor, whichever occurs later.
5.3. In addition to becoming signatory to this Agreement, Employers performing Covered Work will also be or become Party to the current Master Labor Agreement(s) with the Union(s) having traditional and customary building trades craft jurisdiction over the work and representing the employees employed or to become employed by such Employers, upon commencing Covered Work, unless such work is funded in whole or in part with public funds in which case this section 5.3 shall not apply.
ARTICLE 6
UNION RECOGNITION, SECURITY, WAGES AND BENEFITS
6.1. The Employers recognize the Unions as the sole and exclusive collective bargaining representative for all employees engaged in Covered Work. The Parties acknowledge that the collective bargaining relationship established between any Employer and Union is a "pre -hire" relationship permitted by Section 8(f) of the National Labor Relations Act, except that this provision does not change any pre-existing Section 9(a) collective bargaining relationship that exists between any Employer and Union Parties to this Agreement.
6.2. Employees referred by the Union(s) and hired by the Employer(s), shall, as a condition of employment, become and remain members in good standing of the appropriate Union on or by the eighth (8th) day of employment on the Project and be duly licensed at all times where required. Membership under this section shall be satisfied by the tendering of periodic dues and fees uniforrnly required.
6.3. Authorized representatives of the Union(s) shall have access to the Project Site provided that they do not unduly interfere with the work of the craft employees and further provided that such representatives fully comply with established Project rules.
6.4. Each Union shall have the right to designate a working craft employee as steward for each Employer employing such craft on the Project. Such designated steward shall be a qualified workman assigned to a crew and shall perforrn the work of that craft. The steward shall not perform supervisory duties. Under no circumstances shall there be nonworking stewards.
Stewards shall be permitted a reasonable amount of time during working hours to perform applicable union duties.
6.5. All employees performing Covered Work under this Agreement shall be paid the wages and fringe benefits as set forth in their respective Unions' Master Labor Agreement.
Rialto Police Station9Project Labor Agreement
ARTICLE 7
REFERRAL AND LOCAL HIRE
7.1. The Union(s) shall be the primary source of all craft employees.
7.2. Except as otherwise provided in this Agreement, the Employers shall be bound by and utilize the registration facilities and referral systems established or authorized by the Unions signatory hereto when such procedures are not in violation of Federal law. The Unions agree to supply apprentices that are indentured subject to the Division of Apprenticeship Standards through a Joint Labor Management Apprenticeship Program. Employer may rely upon the Union's confirmation of valid apprenticeship status,
7.3. In the event that refen-al facilities maintained by the Unions are unable to fill the requisition of an Employer for employees within a forty-eight (48) hour period after such requisition is made by the Employer (Saturday, Sundays and holidays excepted), the Employer shall be free to obtain workers from any source. The Employer shall inform the Union of any applicants hired from sources other than the referral facilities maintained by the Union within forty-eight (48) hours of such applicant being hired (Saturday, Sundays and holidays excepted) and such applicants shall register with the appropriate Union referral facilities within forty-eight (48) hours of commencing work (Saturday, Sundays and holidays excepted).
7.4. If the employment of local residents on the Project is required for project approval by the requisite governmental entity, the parties agree to meet and confer for the purpose of developing the referral procedures necessary to implement the requirements.
ARTICLE 8
HELMETS TO HARDHATS
8.1. The Employers and Unions recognize a desire to facilitate the entry into the building and construction trades, veterans and members of the National Guard and Reserves who are interested in careers in the building and construction industry. The Employers and Unions agree to utilize their best efforts for the services of the Center for Military Recruitment, Assessment and Veterans Employment (the "Center"), a Joint Labor -Management Cooperation Trust Fund, established under the authority of Section 6(b) of the Labor -Management Cooperation Act of 1978, 29 U.S.C. Section 175(a), and Section 302(c)(9) of the Labor -Management Relations Act, 29 U.S.C. Section 186(c)(9), and a charitable tax exempt organization under Section 501(c)(3) of the Internal Revenue Code, and the Center's "Helmets to Hardhats" program to serve as a resource for preliminary orientation, assessment of construction aptitude, referral to apprenticeship programs or hiring halls, counseling and rnentoring, support network, employment opportunities and other needs as identified by the Parties.
8.2. The Unions and Employers agree to coordinate with the Center to create and maintain an integrated database of veterans and members of the National Guard and Reserves interested in working on this Project and apprenticeship and employment opportunities for this Project. To the extent permitted by law, the Unions will give credit to such veterans and members of the National Guard and Reserves for bona fide, provable past experience.
Rialto Police Station I ()Project Labor Agreement
8.3. In recognition of the work of the Center and the value it will bring to the Project, within ten (10) days of the first hour of Covered Work being performed on the Project, the General Contractor shall make a onetime contribution of $10,000 to the Center on behalf of itself and all other Employers employing workers under the terms of this Agreement. 8,4, The Center shall function in accordance with, and as provided in the Agreement and Declaration of Trust creating the fund, and any amendments thereto, and any other of its governing documents.
8.5. This Article will be interpreted and applied in a manner that permits the Parties to comply with the requirements of the DA and all other requirements of this Agreement.
ARTICLE 9
CONTINUITY OF THE WORK
9.1. The principal purpose of this Agreement is that it provides the Employers and the Unions with the assurance that there will be no strike, sympathy strike, picketing, slowdown, withholding of work, refusal to work, walk -off, sit-down, stand-in, wobble, boycott, hand billing directed at this Project, bannering, disruptive activity or other work stoppage of any kind for any reason, no interference with work on the Project that is excluded from the coverage of this Agreement and that there shall be no lockout by the Employers for the duration of this Agreement, It is agreed, therefore, as follows:
9.2. During the existence of this Agreement, there shall be no strike, sympathy strike, picketing, slowdown, withholding of work, refusal to work, walk --off, sit-down, stand-in, wobble, boycott, hand billing directed at this Project, bannering, disruptive activity or other unauthorized work stoppage of any kind for any reason, no interference with work on the Project that is excluded from the coverage of this Agreement and there shall be no lockout by the Employers for the duration of this Agreement. Employers shall have the exclusive right and discretion to discipline or discharge employees, or to decline to accept re -dispatch of employees to the Employer for any future work, for any violations by employees of this Section 9.2. The General Contractor reserve all rights and remedies in law and equity.
9.3. No picket lines or other actions of the type described in Section 9.2 will be established at the Project by any of the Unions. The Unions agree that they will not directly or indirectly sanction in any way any picket ine, organized or endorsed and will affirmatively take all measures necessary to effectively induce its members to cross the picket line, if established, and report for work as scheduled and that responsible representatives of the Unions who are employed on the Project will also do so themselves.
9.4. Notwithstanding the provisions of Section 9.3, it is agreed that the particular Union involved retains the right to withhold the services of its members (but not a right to picket, handbill or demonstrate) from a particular Employer who fails to make timely payments to the Unions' Health & Welfare, Pension, Vacation and Holiday, Apprentice and Training, or Industry Funds in accordance with the provisions of that particular Employer's current Master Labor Agreement with the particular Union or who fails to timely pay its weekly payroll. However, prior to withholding its members' services on account of a failure to make its weeldy payroll or Rialto Police Stationl 1Project Labor Agreement
timely payments to the Unions' Wealth & Welfare, Pension, Vacation and Holiday, Apprentice and Training, or Industry Funds, the Union involved will give ten (10) days (unless a lesser period is provided within the applicable craft union agreement, but in no event less forty-eight (48) hours) written notice of such failure to pay by registered or certified mail, return receipt requested, to the involved Employer and to the General Contractor. Representatives of the Parties to the dispute will meet within the ten-day period to attempt to resolve the dispute.
9.5. Should an Employer performing work on this Project become delinquent in the payment of Trust Fund contributions required under this Agreement with respect to employees represented by the Union, the Union, in lieu of withholding the services of its members, may request the General Contractor issue joint checks payable to the Employer and the appropriate employee benefit Trust Fund(s) until such delinquencies are satisfied. Any Trust Fund claiming that an Employer is delinquent in its fringe benefit contributions to the Trust Fund will provide written notice of the alleged delinquency to the affected Employer, with copies to the General Contractor. The notice will indicate the amount of delinquency asserted and the period that the delinquency covers. It is agreed, however, with respect to Employers delinquent in trust or benefit contribution payments, that nothing in this Agreement shall affect normal contract remedies available under the MLAs. If the General Contractor is delinquent in the payment of Trust Fund(s) contributions for Covered Work performed on this Project, the General Contractor agrees that the affected Trust Fund(s) may place the General contractor on notice of such delinquencies and the General contractor fiu-ther agrees that the Developer may issue joint checks to the General Contractor and the Trust Fund(s) until the delinquency is satisfied.
9.6. It is specifically agreed that there shall he no strike, sympathy strike, picketing, lockout, slowdown, withholding of work, refusal to work, walk -off, sick-out, sit-down, stand-in, wobble, boycott or other work stoppage or other labor action of any kind as a result of the expiration of any local, regional or other applicable labor agreement having application at the Project and/or failure of the Parties to that agreement to reach a new contract. In the event that such a local, regional, or other applicable labor agreement does expire and the parties to that agreement have failed to reach agreement on a new contract, Covered Work will continue on the Project on one of the following two bases, both of which will be offered by the Union(s) involved to the General Contractor and the Employer(s) affected:
9.6.1. Each of the Union(s) with a contract expiring must offer to continue working on the Project under interim agreernents that retain all the terms of the expiring contact, except that the Union(s) involved in such expiring contract(s) may each propose wage rates and employer contribution rates to employee benefit funds under the prior contract different from what those wage rates and employer contributions rates were under the expiring contract(s). Said interim agreement(s) would be superseded by any subsequently reached industry agreement(s) as of the date the industry agreement is reached. The terms of the Union's interim agreement offered to the General Contractor and the Employers will be no less favorable than the terms offered by the Union to any other employer or group of employers covering commercial construction work in San Bernardino County; and
9.6,2. Each of the Union(s) with a contract expiring must offer to continue working on the Project under all the terms of the expiring contract, including the wage rates and employer contribution rates to the employee benefit funds, if the Employer(s) affected by that contract Rialto Police Stationl2Project Labor Agreement
agrees to the following retroactivity provision: if a new local, regional or other applicable labor agreement for the industry having application at the Project is ratified and signed during the term of this Agreement and if such new labor agreement provides for retroactive wage increases, then each affected Employer shall pay to its employees who performed work covered by this Agreement at the Project during the hiatus between the effective dates of such labor agreements, an amount equal to any such retroactive wage increase established by such new labor agreement, retroactive to whatever date is provided by the new local, regional or other applicable agreement for such increase to go into effect, for each employee's hours worked on the Project during the retroactivity period, All Parties agree that such affected Employer shall be solely responsible for any retroactive payments to its employees and that neither the General Contractor nor the Developer has any obligation, responsibility or liability whatsoever for any such retroactive payments or collection of any such retroactive payments from any other employer.
9.7. Some Employers may elect to continue to work on the Project under the terms of the interim agreement option offered under Section 9.6.1 above and other Employers may elect to continue to work on the Project under the retroactivity option offered under Section 9.6.2 above.
To decide between the two options, Employers will be given one week after the particular labor agreement has expired or one week after the Union has personally delivered to the Employer, in writing, its specific offer of terrns of the interim agreement pursuant to Section 9.6.1 above, whichever is the later date. If the Employer fails to timely select one of the two options, the Employer shall be deemed to have selected the option of Section 9.6.2 above.
ARTICLE 10
JURISDICTIONAL DISPUI'ES
10.1. The assignment of work will be solely the responsibility of the Employer performing the work involved, and such work assignments will be in accordance with the Plan for the Settlement of Jurisdictional Disputes in the Construction Industry (the "Plan") or any successor Plan.
10.2. All jurisdictional disputes between or among Building and Construction Trades Unions and Employers shall be settled and adjusted according to the present Plan established by the Building and Construction Trades Department or any other plan or method of procedure that may be adopted in the future by the Building and Construction Trades Department. Decisions rendered shall be final, binding and conclusive on the contractors and Unions. 103. Any dispute arising under this Article involving the Southwest Mountain States Regional Council of Carpenters or any of its subordinate bodies shall be submitted to arbitration. An Arbitrator shall be chosen by the procedures specified in Article V, Section 5, of the Plan from a list composed of John Nagel, Robert Hirsch, and Thomas Pagan. The arbitrator's hearing on the dispute shall be held at the offices of the Trades Council within fourteen (14) days of the selection of the arbitrator. All other procedures shall be as specified in the Plan.
10.4. All jurisdictional disputes shall be resolved without the occurrence of any strike, work stoppage, or slow -down of any nature and the contractor's assignment shall be adhered to until the dispute is resolved. Individuals violating this section shall be subject to immediate discharge.
ARTICLE 11
Rialto Police Stationl3Project Labor Agreement